Consumer scams are getting more creative with each passing year. He Federal Trade Commission (opens in a new tab) (FTC) reported that consumers lost more than $5.8 billion to scammers in 2021, an increase of more than 70 percent from the previous year. And the data for 2022 is expected to be even higher when it is released, as criminals experiment with more complex and inventive scams.
One of the latest technology-assisted tactics involves scammers contacting you posing as your bank, stealing sensitive data and taking over your accounts. So how do these scams work and how can you protect yourself?
Phony Bank Scams: How They Work
He Detroit Free Press (opens in a new tab) reports a recent increase in scammers targeting checking and bank accounts, particularly during the recent holiday shopping rush. The latest trend is to impersonate or “fool” bank fraud departments.
Scammers and criminal gangs communicate with potential victims through fake text messages, phishing emails, or phone calls, both live and pre-recorded. Once they’ve impersonated the victim’s bank, the scammers hope to confuse their brand into creating fictitious stories about thieves hacking into their bank accounts.
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The scammer tries to convince the victim to reveal personal information or click on fraudulent links to help “stop the crooks” when, of course, the scammer’s real goal is to take over their bank account.
Scammers use these fake, time-sensitive warnings to scare you into acting before you have time to think, according to the FTC (opens in a new tab). This “fight or flight” feeling is what helps scammers achieve their goals, and is often successful unless potential victims understand how to protect themselves.
He American Bankers Association (opens in a new tab) reports that scammers also attempt intricate phishing attempts to trick consumers into using person-to-person payment apps to transfer money to criminals, under the guise of a legitimate business or someone they trust. Criminal gangs usually already have some of their victims’ personal data, often obtained through a data breach, which they use to make the scam harder to detect.
PayPal, Venmo, CashApp and Zelle are the money transfer apps of choice for scammers. According to the Consumer Financial Protection Bureau (opens in a new tab) (CFPB), consumers lost $130 million in 2021 by mistakenly sending money to scammers through these payment apps or similar services.
How to protect yourself
To protect yourself against these types of scams, follow some fundamental rules of the CFPB (opens in a new tab):
- Never trust caller ID, especially when they ask you for private information. Banks will never call and ask you for that information over the phone, to avoid this exact scenario.
- Worried that a call or message is fake? Do not use the number provided. Instead, contact your bank or credit card company through their mobile app or through their official phone number, which is usually found on bank statements and on the back of your credit or debit card.
- Never share passwords or numbers for Social Security, credit cards or bank accounts.
- Never send money to someone you don’t know. If you think you sent money to a scammer, please contact your bank or the operator of the payment app you used to report a possible error and hopefully, recover your funds (opens in a new tab).
- put your number in it National Do Not Call Registry (opens in a new tab) to avoid robocalls from scammers. Go to www.donotcall.gov (opens in a new tab) or call (888) 382-1222.
- Send complaints about scammers and fraudulent activity to www.consumerfinance.gov/complaint (opens in a new tab).