Banking Fraud: How to Spot It and How to Avoid It

In the new age of banking, technology is increasingly creating both ease and access for consumers. It can also create challenges for cyber security. While in today’s growing digital age has presented new opportunities for fraudsters to steal from people’s personal accounts, older and more traditional scam methods like check fraud still happen frequently.

In order to stay ahead of individuals looking to perpetrate these types of scams, Amerant is offering indicators of fraud along with tips to avoid being a victim.

Check Fraud

Checks are a long-established, traditional payment method and a single check can provide access to a very large sum of money. This continues to make check fraud a challenge for financial institutions as paper checks still represent a significant method of payment, particularly among businesses.

Officials have reported that checks are being intercepted before arriving to the Post Office which are subsequently altered, washed, or counterfeited and cashed by criminals. Stolen checks are also showing up in the dark web for sale. Fraud schemes involving checks take many forms:

• Altered: criminals take the good check and use chemicals or other means to erase the amount or the name of the payee, so that new information can be entered.
• Counterfeited: Counterfeit checks are presented based on fraudulent identification or are false checks drawn on valid accounts.
• Forged, either as to signature or endorsement.
• Close account fraud: based on checks being written against closed accounts. This type of fraud generally relies upon the float time involved in inter-financial institution transactions.

Stolen checks also contain personal information such as names and addresses that are later used to commit identity theft. Criminals also use business information such as names, addresses and bank account information to commit Business Email Compromise (BEC) fraud and other related fraud schemes.

Payment Fraud

Additionally, digital payment platforms, like Zelle®, have recently been targeted by scammers, where users may get suspicious text messages or emails asking for money. Rather than stealing checks, these scammers will impersonate financial institutions to get personal information from customers. The most important thing to remember with this kind of scam is to never provide information to anyone over text message or any unsecure messaging platform. Like check fraud, there are different ways for scammers to use to commit payment fraud:

• You receive a text message regarding a recent charge on your account, asking for your verification. You reply that you don’t recognize the charge in question. You then receive a phone call from what appears to be your financial institution’s 800 number, and someone claiming to be an employee requests you to verify your account information, including your online credentials and a texted verification code. If you provide the information, the fraudster will then use it to log in to your account and use your account to transfer funds.
• You receive a call from a service provider such as internet or cable provider asking for your credentials and passcode to process a refund. When this information is provided, a fraudster can process a transfer of funds. This transfer can be finalized event before the call is completed.
• You are hired for a job and receive a fraudulent check from your new “employer”. You are told by your “employer” to deposit the funds using mobile check deposit and to send the money out using Zelle®. By the time the check bounces, the funds are already gone.
• A fraudster may place a false online ad for merchandise, and after you pay for the merchandise, the fraudster keeps the money and never actually sends you the merchandise.

So, to protect your money and your identity from digital payment and check fraudsters alike, here are some key tips to keep in mind:

• Do not share personal or account information online, via text messages or over the phone.
• Shred sensitive documents before throwing them away.
• Store checkbooks and account documentation in a safe place.
• Drop your mail off directly at the Post Office.
• If a check has been lost or stolen report it to us immediately.
• Monitor your account periodically and report suspicious activity immediately.
• Set up your alerts and communications.

Amerant business customers can take advantage of Amerant’s Positive Pay service to help protect against fraud. Learn more: https://www.amerantbank.com/products/treasury-management/.