With numerous data breaches affecting millions of people, many Americans are on alert about
credit cardfraud. But not as many are aware when it comes to bank account scams. Bank account scams target a victim’s cash, and the damage can be much more detrimental to one’s finances than other scams – including credit card fraud.
Under the Fair Credit Billing Act and the Electronic Fund Transfer Act, you can be held accountable for a maximum of $50 if unauthorized purchases were made on your credit card. In the case of bank account fraud, your liability will depend on when you report it. The bad news is, you are accountable for all fraudulent charges on the account if you report them more than 60 days after the statement is sent.
10 Ways to Protect Yourself From Online Fraud
Check Overpayment Fraud
Check overpayment fraud is a popular sales scam that targets sellers from online auctions and classified advertisement websites. During a transaction, the fraudulent buyer will pay the seller with a non-cash payment for more than the amount of the item. In this case, scammers need to move quickly in order to prevent the seller from verifying the check. The seller will be asked to immediately deposit the full amount and wire the difference to the buyer.
The phony check will eventually bounce and be returned unpaid, which will cost the seller an average of $12.85 in a
deposited item returned fee, according to a 2014 MyBankTracker analysis. This is in addition to an average of $27.40 the seller will be charged for the outgoing domestic wire transfer made to the criminal. The worst part? The seller will be fully accountable for the fraudulent check and the wired amount, which cannot be reversed.
How to avoid this scam: If you receive any non-cash payments, such as a check, money order, U.S. postal money order or other similar items, you should take appropriate steps to protect yourself. Even if you’re not an expert at spotting a counterfeit check, you can avoid becoming a victim by calling the bank where the check was issued or asking your own bank teller to verify its legitimacy.
Charity Fraud
Anyone who still uses a landline may have experienced this once or twice. You receive a call asking for donations to the local police department or to military families. After you’re hooked, the crooks elicit information about your bank account or debit card to make the donation over the phone – giving them full access to your checking account.
How to avoid this scam: To make sure your good intentions do not go to waste,
the safest way to give to a charity is by choosing an organization you are familiar with. Be cautious about giving your information to individuals who reach out to you first by telephone or email.
Cashing a Check for a Stranger
No one wants to turn his or her back on someone who needs help. This scam involves strangers conveniently stopping you at the bank and asking if you can cash a check for them since the bank won’t allow them to because they do not have an account at that bank. In exchange, they’re willing to give you some cash for your time and trouble. Here's the catch: Although the check is deposited, it hasn’t actually cleared. So even if you think you pulled the money from their check, you actually pulled money from your funds and handed them over to the criminal.
How to avoid this scam: In general, it’s not a good idea to cash a check for anyone, much less a stranger. While it is possible to
cash a check at a bank as a non-customer, there is still a fee. It is often less than $10 and therefore would not make sense for someone else to pay you such a high incentive to do this favor for them – unless they have ulterior motives.
Work-at-Home Job Scams
The economy is still recovering, and the recession resulted in a surplus of people looking for ways to
make quick cash. Some crooks take advantage of this situation by offering jobs that require people to transfer funds through their personal checking accounts. The scammers offer victims a “commission” in exchange for facilitating money transfers through their personal accounts.
How to avoid this scam: If you are asked to work at home for minimal work and high pay, it’s probably a scam. Do not accept any work-at-home opportunities that involve sending money in advance and sending a portion to a third party via wire transfer. Also, when receiving a check, make sure there aren’t discrepancies or typos that may cause the check to be flagged as being fraudulent.
Award Scams
Many situations that seem too good to be true usually are. That’s not to say these things don’t happen – but winning a lottery or sweepstakes without actually participating? It’s probably not very likely. In these scams, you are told that you’ve won a foreign lottery. Crooks will send you a very large check to deposit into your personal checking account. You will then be asked to immediately wire a portion of the funds to pay for government taxes and administrative fees.
How to avoid this scam: If you didn’t apply for it, you didn’t win it. Note that it is illegal to participate in a foreign lottery via mail or phone in the U.S. Additionally, when winning a lottery, you will not be responsible for paying taxes or fees directly to the government.
Protect Yourself
Scammers will continue to come up with creative ways to get into people’s bank accounts, which often involves victims pulling cash out of their own accounts to hand over to the criminals.
Keep in mind that scammers often target people who are searching for jobs, dating, selling products and even do-gooders looking to help someone in need. Be sure to keep these common scams and tips in mind before you put your funds at risk.
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