Bank Account Scams

Online banking scams are becoming increasingly common, so it’s critical to know the different types of fraud that can occur. Recognizing common online bank scams can help protect you and your loved ones from potentially devastating financial loss. Read on to learn more about each of the most common scams, and to see how to avoid becoming a victim. 

Phishing Scam

Phishing is a scam where criminals pretend to be a legitimate company or organization in an attempt to obtain sensitive information such as: 

  • Usernames
  • Passwords
  • Credit card numbers
  • Bank account details 

They may send emails or text messages with links to fake websites (that look real) to trick you into entering your personal information.

How to avoid

It’s important not to click on suspicious links or respond directly with personal information. Even if you receive an email claiming to be from your bank or other financial institution, do a little digging before responding.


Auto-Withdrawal Scam

Auto-withdrawal scams involve criminals setting up automatic payments from your account without your knowledge. This usually involves criminals sending out phishing emails. First they ask for payment details in the email (which looks legitimate). Then, they set up an auto-withdrawal process for recurring payments, taking money out of your account each month until you notice and cancel it.

How to avoid

To avoid this scam, make sure you only provide payment details over email if you trust who’s requesting them and know why they need them.


Check-Cashing Scam 

Check cashing scams involve criminals sending checks made out in someone else’s name but with your address listed as the payee on the check.

The criminal then asks you to cash the check and wire back a portion of the funds via wire transfer services such as Western Union or MoneyGram.

How to avoid

To avoid check cashing scams, always verify who issued a check before cashing it and never agree to wire money back once received – even if promised a reward for doing so!


Virus Attack

Virus attacks are another form of online banking fraud. These attacks install malicious software onto computers without you knowing, allowing hackers to access your accounts without authorization. They often come through spam emails with attachments that contain malware when opened.

How to avoid

To protect yourself against virus attacks, ensure your anti-virus software is updated regularly on all devices used for online banking activities. This includes phones, tablets, laptops, etc.


Overpayment Scam

Overpayment scams target individuals and businesses. The scammer will send an email or other form of communication claiming to be from a legitimate company, often requesting goods or services in exchange for payment.

The money is then sent as an overpayment, with instructions to wire back the difference. For example, if you were selling something online for $100, you might get a check for $500 and be asked to wire back the remaining $400. Unfortunately, the check may not clear your bank account when deposited, though. Then you’re left responsible for any fees associated with it bouncing.

How to avoid

To avoid falling victim to this type of scam, never accept payments larger than what was agreed upon. In addition, don’t agree to wire back any portion of the payment received and only accept checks from trusted sources such as banks. Verify all contact information provided before doing business with someone new, and always research companies before engaging in transactions with them online.

If something seems wrong with the transaction, trust your gut instinct and do not proceed until everything has been verified first.


Stolen Password Scam 

Stolen password scams are common online banking scams that can be difficult to spot. Scammers use stolen passwords and usernames to gain access to bank accounts, credit cards, or other personal information.

They may also use the unauthorized credentials to make fraudulent purchases or transfers from your account.  

How to avoid

Make sure you never share your login details with anyone else, even if they claim it’s for security purposes. Additionally, consider using two-factor authentication as an extra layer of protection for your accounts.

You should also keep an eye on your financial activity and report any suspicious transactions immediately.

Monitor accounts regularly and look for anything unusual like large withdrawals or strange charges on credit cards or debit cards.


Wireless Network Targeting Scam

Wireless network targeting scams are a type of online scam that involves hackers gaining access to your personal information by targeting your wireless network.

This type of scam is particularly dangerous. It can be difficult to detect, and a hacker may have access to sensitive data such as bank account numbers, passwords, and credit card information.

Hackers use various methods to gain access to a wireless network. They might use malware or spyware, set up fake Wi-Fi networks with similar names as legitimate ones, or simply guess weak passwords. Once they gain access, they can monitor all network activity and steal any confidential data that passes through it.

How to avoid

Change your router password regularly, disable remote administration features, enable encryption for all transmitted data, don’t connect to unknown Wi-Fi networks, avoid public hotspots when possible, keep anti-virus software updated, and be aware of phishing emails or other suspicious activities on your computer.

Investing in additional security measures like firewalls or virtual private networks (VPNs) can also help.  


Charity Scam

Charity fraud schemes ask you to donate money to organizations that don’t do anything. Instead, your donation goes to the fake charity’s creator. Scams like this can happen anytime, but they’re especially prevalent after disasters.  

How to avoid

Before giving money to a group, do your research. Use websites dedicated to evaluating charities, such as www.charitynavigator.org.


Imposter Scam

Imposter scams come in many variations, but they all work the same way: scammers pretend to be someone you trust to get money from you. Examples of organizations commonly used in imposter scams include: 

  • The government
  • The IRS
  • The Federal Trade Commission (FTC) 
  • The FBI 
  • First Responders (Firefighters/Police)
  • Financial Institutions
  • The Utility Company
  • Your bank

How to avoid

Make sure the person you’re talking to is who they say they are. Don’t send money quickly or secretly. If you’re not sure you’re sending money to a real friend or family member, don’t send it by wire transfer or overnight delivery.


Online Banking Fraud Red Flags  

Online banking fraud is a growing concern for customers of financial institutions. Knowing the potential risks and red flags associated with online banking scams is essential. Be aware of the following red flags:

  • Receiving a suspicious-looking email or text message that appears to come from your bank. The message may ask you to click on a link or provide personal information such as your account or Social Security number.
  • Receiving emails from unknown senders offering money in exchange for access to your bank account.
  • Finding unauthorized auto-withdrawals, where someone has set up automatic payments from your account without authorization or your knowledge. Often these payments go unnoticed until they start adding up significantly over time!
  • Bank deposit scams that involve receiving fake checks via mail or email, with instructions asking you to deposit them into your account and transfer funds back out again.

10 Ways to Protect Against Bank Account Scams

It’s important to be aware of the various bank account scams that exist, so you know how to protect yourself. Here are some tips on how to keep your money safe:

  1. Check your balance daily: Checking your balance every day helps ensure no unauthorized transactions have been made. This also helps you quickly spot any suspicious activity or fraudulent charges so you can take action immediately.
  2. Review your monthly statements: Make sure to review all of your monthly statements carefully for accuracy and look out for any discrepancies or unfamiliar charges. If something looks off, contact your bank immediately and report it as fraud.
  3. Be careful sharing your account info: Be wary of anyone asking for personal information such as passwords, credit card numbers, Social Security numbers, etc., especially over email or text messages. Never give out this type of sensitive information unless you know who is requesting it and why they need it.
  4. Use strong passwords (and change them often): When creating an online banking password, use letters (upper-case & lower-case), numbers, and symbols that someone else cannot easily guess. You should also change passwords every few months just in case they become compromised at some point in time without your knowledge.
  5. Install anti-virus software: Install anti-virus software on any device you use for online banking. This helps protect against viruses that could lead to identity theft. Make sure your software is up-to-date with the latest security patches released by developers so it remains effective against malicious attacks targeting vulnerable systems.
  6. Monitor your credit: By monitoring credit reports regularly, you’ll be able to detect any suspicious activity quickly. If there are signs of identity theft attempts, contact the three major credit bureaus (Equifax, Experian, TransUnion) and file a dispute claim immediately.
  7. Contact your bank or financial institution as soon as you suspect a problem: If you suspect any fraud, contact your financial institution immediately. They’ll be able to help you track down any unusual or suspicious activity and guide you in the next steps.
  8. Don’t cash checks for people: Don’t cash checks for people you don’t know or trust. 
  9. Be aware of any pressure to act immediately: Scammers will make the situation high-stakes and high-pressure to keep you from really analyzing what’s happening. By making you feel stressed, they’re hoping you’ll be willing to do what they ask. 
  10. File a complaint: If you’ve been a victim of fraud or have been scammed, reach out to the authorities as soon as possible to file a complaint. The sooner you act, the quicker your money will (hopefully!) be returned. 

Concerned about fraud? Check out our Fraud Protection page today. 

Final Thoughts

Bank account scams are a real threat to your financial security. It’s important to be aware of the common online bank scams and red flags that may indicate fraudulent activity. By taking the necessary steps to protect yourself, you can help ensure that your money remains safe and secure in your bank account.

Remember: If something seems too good to be true or suspicious, it likely is. Don’t take any chances with your hard-earned money; always stay vigilant.

Protect yourself from bank account scams by becoming a member of Island Federal Credit Union. With our secure online banking services, you can rest assured that your money is safe and secure. We also offer fraud protection services to help protect you from any fraudulent activity. Our team of experts are here to help you understand the risks associated with online banking and provide tips on how to keep your accounts safe. Join us and take advantage of all the benefits Island Federal Credit Union has to offer! Contact Us today to learn more.