Greg's Corner

Tagged: bank fraud Toggle Comment Threads | Keyboard Shortcuts

• 

  Geebo 9:00 am on December 17, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), impersonation scam ( 148 ), Scams ( 1,386 ), Zelle ( 67 )   

  New Zelle Protections Haven’t Changed Anything 

  

  By Greg Collier

  For years, consumers have been targeted by a common and deceptive scheme: scammers posing as bank representatives convincing victims to use Zelle to ‘protect’ or recover their money. Despite growing awareness of this tactic, the outcome for victims has often been devastating, leaving them with little recourse and significant financial loss.

  Zelle and the banks behind it have long faced criticism for not doing enough to protect consumers. In response to mounting pressure, Zelle announced a new policy in late 2023 that banks would be required to reimburse customers for certain types of scams. The wording of this policy included an important caveat. Banks would refund consumers for “qualifying imposter scams”.

  The intent of the new policy was to create stronger protections for victims of fraud. However, recent cases suggest these so-called new guidelines are not much different from the old ones. Banks continue to deny reimbursements based on the familiar rationale that customers ‘authorized’ the transactions. This remains the linchpin argument banks use to place responsibility on consumers, even when the authorization occurred under false pretenses orchestrated by scammers.

  A recent incident illustrates how easily someone can fall victim to this type of fraud. A couple was contacted by someone claiming to be from Wells Fargo’s fraud department. The phone number even appeared to belong to the bank, thanks to modern spoofing technology. The caller asked about supposed fraudulent activity, reassured the couple that their funds would be safe, and then walked them through a series of Zelle transactions. Only later did they realize it was all a scam, and they had lost thousands of dollars.

  Despite reporting the incident to their bank, their request for reimbursement was denied. The bank cited the fact that the transactions were ‘authorized’. This reasoning aligns with the longstanding defense that if customers themselves approve the transfer, even under pressure or misinformation, the responsibility remains with them.

  Zelle’s official stance highlights a crucial ambiguity in their policy. The company has stated that not all scams involving imposters qualify for reimbursement, but they refuse to share the criteria for ‘qualifying’ cases. According to Zelle, disclosing this information would give criminals a playbook for avoiding detection. This lack of transparency leaves consumers frustrated and uncertain about whether they can expect any protection at all.

  The central issue remains that scammers have become increasingly adept at manipulating technology to exploit consumer trust. Policies promising reimbursement offer a glimmer of hope, but the reality for many victims has not improved. While Zelle and participating banks claim they are addressing the problem, their actions suggest otherwise. Until clearer and stronger protections are implemented, consumers must remain vigilant and cautious with unsolicited calls and Zelle transactions.

  For now, the lesson remains the same: don’t trust caller ID, don’t act under pressure, and always verify directly with your bank.

   

  Leave a ReplyCancel reply
• 

  Geebo 9:11 am on December 11, 2024 Permalink | Reply
  Tags: bank fraud, banks ( 7 ), check washing ( 17 ), Scams ( 1,386 )   

  Check Washing is a Growing Financial Threat 

  

  By Greg Collier

  In Chicago, a local business owner recently experienced the devastating impact of a sophisticated check-washing scam, losing nearly $30,000 from her business account. This incident jeopardized her ability to cover critical expenses such as payroll, rent, and insurance, underscoring the grave consequences of such financial crimes. The scam also highlighted troubling vulnerabilities in the banking system and raised urgent questions about how such crimes can be prevented.

  Check washing involves stealing checks, altering the information, and fraudulently cashing them. In this case, checks originally written for modest amounts, ranging from $25 to $375, were altered to just under $10,000 each. This manipulation was strategic, as amounts of $10,000 or more typically trigger federal safeguards designed to detect and prevent fraud. By keeping the altered amounts just below this threshold, the perpetrators likely avoided immediate scrutiny, revealing significant gaps in current fraud detection measures.

  Despite the victim’s prompt response, including filing theft reports and fraud affidavits, her ordeal stretched on for months. The resolution came only after media coverage pressured the financial institutions involved. This delay reflects a troubling trend in the banking industry, where victims of fraud often face prolonged struggles for restitution unless public attention is brought to their cases. Such systemic failures call into question the adequacy of existing consumer protections and the responsiveness of banks to their customers’ needs.

  The victim’s frustration was compounded by the failure of mobile deposit systems to detect glaring irregularities in the altered checks. Even with visible signs of tampering, such as whiteout, the checks were processed without issue. While banks reportedly invest billions annually in fraud prevention technologies, this incident highlights persistent gaps that criminals exploit with ease. The banking industry must adopt more advanced detection tools and processes to address these vulnerabilities effectively.

  For individuals and businesses, vigilance remains essential in protecting against check fraud. Simple precautions, such as ensuring checks are filled out completely and securely delivered, can help reduce risks. Monitoring account activity closely and promptly reporting discrepancies can also aid in catching fraud early. The adoption of electronic payment methods offers an additional layer of security by eliminating the physical check entirely.

  However, personal efforts alone are insufficient to address the systemic nature of this issue. Financial institutions must take a more proactive stance in combating fraud, including implementing enhanced scrutiny of checks processed through mobile systems. Faster responses to fraud claims and stronger customer support should become standard practices, not just actions taken under public pressure. Additionally, the banking sector needs to modernize its approach, utilizing innovative solutions and technology to stay ahead of evolving threats.

  Until banks and regulatory bodies prioritize comprehensive solutions, stories like this will continue to highlight the precarious balance between convenience and security, leaving consumers and businesses to shoulder the burden of a flawed system.

   
• 

  Geebo 9:00 am on December 5, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), chip cards, couriers ( 5 ), debit cards ( 15 ), Scams ( 1,386 )   

  Latest Bank Scam Targets Card Chips 

  

  By Greg Collier

  Chip-enabled debit cards are designed to provide an extra layer of security for consumers, but scammers are now exploiting this technology in a startling new scheme that could drain your bank account. If you’re not careful, you could fall victim to this sophisticated fraud that combines phishing, spoofing, and clever social engineering.

  Here’s how the scam unfolds. It begins with an email or text message that appears to be from your bank, alerting you to an issue with your debit card. This message is quickly followed by a phone call, supposedly from your bank’s customer service team. Thanks to spoofing technology, the call looks legitimate, displaying the actual phone number of your bank.

  The caller claims there’s a problem with your card and instructs you to cut the card in half for security reasons, but keep the chip intact. They then explain that a bank representative or courier will come to your home to collect the chip for further investigation or replacement. When the ‘courier’ arrives, they use subtle but effective social engineering tactics to convince you to share your PIN. Once they have both the chip and your PIN, the scammers can easily install the chip into a new card and access your funds.

  This scam is particularly alarming because it leverages trust in your bank and creates a false sense of urgency. However, it’s critical to remember one key fact, no legitimate bank will ever send a courier to your home to address issues with your account. Any such request should be an immediate red flag.

  This isn’t the only scam involving so-called ‘couriers’. Fraudsters often use individuals posing as couriers to execute other schemes, such as fake lottery winnings or fraudulent purchases. In some cases, they may even recruit unwitting ride-share drivers to pick up and deliver items, adding another layer of confusion and detachment from the actual crime.

  To protect yourself, never share your PIN or other sensitive information with anyone, even if they appear to be from your bank. If you receive a suspicious call or message, hang up and contact your bank directly using the number on the back of your card. Additionally, never hand over your card chip or any other personal banking materials to someone claiming to be a representative of your bank.

  By recognizing the warning signs and refusing to engage with fraudulent requests, you can safeguard your finances and avoid becoming a victim of this alarming new scheme.

   
• 

  Geebo 8:00 am on October 10, 2024 Permalink | Reply
  Tags: bank fraud, banks ( 7 ), check washing ( 17 ), Scams ( 1,386 )   

  Banks Turn Their Backs on Check Fraud Victims 

  

  By Greg Collier

  Imagine discovering that a substantial payment intended for a trusted vendor never made it to the right hands. Instead, a thief intercepted the check, altered it, and cashed it, leaving the original payer out thousands of dollars. With check fraud up 365% since the pandemic, scenarios like this are becoming all too common. Yet, many victims find themselves met with indifference from banks when seeking help.

  Despite millions of dollars lost to check fraud each year, financial institutions are not always responsive. Many banks enforce strict deadlines for reporting fraudulent activity, often limiting victims to just 30 days. This leaves those who don’t notice the fraud immediately with little recourse, even though the law allows for a year to report such incidents. The reality is that while banks have the resources to combat fraud, they often prioritize minimizing their own liability over helping customers recover lost funds.

  For small businesses and individual consumers, banks’ reluctance to assist fraud victims adds another layer of stress. It’s not enough to run daily operations or handle personal finances; now, constant vigilance over bank transactions is required. Those writing checks are routinely expected to monitor their accounts for signs of tampering and follow up on every cleared payment.

  While monitoring accounts and scrutinizing check images are sound practices, they should not be substitutes for meaningful bank support. Victims of check fraud, who have already suffered significant losses, should not be left to shoulder the responsibility of detecting and reporting fraud in such a short timeframe.

  When a fraudulent check is cashed, the altered payment details are often clear evidence of tampering. Still, many banks fall back on rigid policies, pointing to account agreements that limit victims’ reporting windows. Even when customers provide proof of unauthorized alterations, banks often refuse to compensate them, citing missed deadlines as grounds for denial.

  This unhelpful approach effectively leaves victims with nowhere to turn. The frustration is compounded by the fact that banks have the tools to detect such fraud and could play a more active role in restitution. Unfortunately, the industry standard leans towards protecting bank interests rather than aiding those who suffer losses.

  While change in the legal landscape is necessary, there are steps people can take to protect themselves from check fraud. Some practical measures include:

  • Hand Delivering Checks: Whenever possible, avoid mailing checks by delivering them directly to the intended recipient.
  • Regular Account Monitoring: Frequently review account statements for suspicious transactions.
  • Checking Cleared Payment Details: Ensure that the payee and amount on cleared checks match the original information.

  These precautions can help reduce the risk of falling victim to fraud. However, they should not be seen as a replacement for the need for better bank practices and stronger legal protections.

  The rise in check fraud demands a shift in how financial institutions treat their customers. While some precautions can be taken to prevent fraud, the primary responsibility should not rest on the victims. Banks have the capacity to detect and prevent check fraud and should be held to higher standards of accountability. Legal reforms are needed to create a fairer environment where those affected by fraud can seek restitution without navigating impossible deadlines.

  Until meaningful changes are implemented, consumers must remain cautious and take proactive measures to safeguard their finances, despite a system that often leaves them unsupported.

   
• 

  Geebo 8:00 am on August 23, 2024 Permalink | Reply
  Tags: bank collapse ( 2 ), bank fraud, banks ( 7 ), embezzlement ( 2 ), pig butchering scam ( 15 ), Scams ( 1,386 )   

  Banker Who Fell Victim to Scam Gets Prison Time 

  

  By Greg Collier

  Last year, we brought you the story of a rural Kansas bank that collapsed after the Bank’s CEO fell victim to the pig butchering scam. The pig butchering scam involves a scammer persuading a victim to invest in cryptocurrency using a fake exchange. The victim is then shown that their initial investment has grown significantly. However, when they attempt to withdraw their funds, they are informed that an additional fee, often as large as the original investment, must be paid first.

  A federal judge recently sentenced the 53-year-old bank CEO to 24 years in prison after it was determined the CEO embezzled bank funds while still believing he could get the returns on his investments.

  As was mentioned in the previous post, the CEO even asked a friend and client for a $12 million loan, so the CEO could get his personal money out of the cryptocurrency investment. The friend was even assured by the CEO that the initial investment wasn’t made with the bank’s money. Since then, details have been made public where the friend warned the CEO that the investments were a scam and that he should walk away from it.

  The CEO did not take his friend’s advice, and in his pursuit of profit, continued to send money to his scammers. However, before long, he was wiring bank funds to the scammers. When the friend heard from bank employees that the CEO was wiring money overseas, the friend went to the bank’s board to try to put a stop to it. Before it was all over, the CEO had embezzled $47.1 million.

  Anyone can fall victim to a scam, regardless of their education, experience, or financial savvy. Scammers are highly skilled at exploiting vulnerabilities, preying on trust, greed, or desperation. They use sophisticated tactics to create a sense of urgency, promising quick and substantial returns on investments that seem too good to pass up. Once a victim is hooked, they are gradually drawn deeper into the scam, often believing that just one more payment will unlock the profits they were promised. The allure of easy money can cloud judgment, leading even those in trusted positions to make increasingly irrational decisions.

  These scams can easily turn a victim into a criminal. When personal funds run dry, desperation sets in, and victims may resort to unethical or illegal actions to recover their losses. They might embezzle money, falsify documents, or deceive others to gather more funds, all in the hope of finally reaping the rewards they were promised. What began as a mistake can spiral into a series of criminal acts, driven by the delusion that success is just around the corner. This transformation from victim to perpetrator highlights how dangerous and insidious these scams can be, not just financially but morally as well.

   
• 

  Geebo 8:00 am on August 1, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), Chase ( 14 ), impersonation scam ( 148 ), Scams ( 1,386 )   

  Couple recovers life savings after bank scam 

  

  By Greg Collier

  A retired couple from Buford, Georgia, has finally regained their life savings after falling victim to a sophisticated cyber scam. Their journey to justice was fraught with frustration and dead ends, but their perseverance has paid off.

  The scam began when the couple received text messages purportedly from their bank’s fraud department, warning that a debit card had been compromised. Concerned, they called the number provided, believing they were contacting Chase Bank. Instead, they unwittingly connected with scammers who, within 20 minutes, drained their bank account of nearly $50,000.

  Despite immediately reporting the fraudulent transaction, the couple was initially met with skepticism and dismissal. The bank claimed that they had either authorized the transactions or benefited from them.

  For months, the couple faced bureaucratic roadblocks. The police hadn’t assigned a detective to their case, and a federal watchdog group offered no assistance. The bank, meanwhile, considered the case closed.

  Frustration finally caught the attention of an assistant district attorney. With help, the case was brought to detectives who accessed the crucial phone records. These records revealed that scammers had called the bank, impersonating the couple and authorizing the large money transfers.

  The new evidence prompted the bank to conduct a third-party review, leading to the reversal of their previous decision. The stolen funds were restored to the couple’s account.

  If you ever find yourself in a similar situation, obtaining your phone records and presenting them to both the police and your bank can be crucial steps toward recovery.

  However, this case also raises important questions. Why do banks often accuse victims of benefiting from scams? Why does it frequently take media involvement before banks offer refunds to the victims? The journey to justice for scam victims should be more straightforward, highlighting the need for banks to prioritize customer protection and trust.

   
• 

  Geebo 8:00 am on July 24, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), Scams ( 1,386 ), seniors ( 9 ), Zelle ( 67 )   

  Zelle scams hit seniors the hardest 

  

  By Greg Collier

  For nearly two years, Zelle-related scams have persisted, affecting countless users who rely on this popular peer-to-peer payment app. Despite its widespread adoption and backing by major banks, the platform has become a fertile ground for fraudsters, exploiting vulnerabilities and leaving victims with little recourse. As the financial toll mounts, concerns about the app’s security and consumer protection measures continue to grow.

  A senior citizen living in Western Pennsylvania, with a disability and on a fixed income, was recently swindled out of over $1,400 through unauthorized transactions on Zelle, a cash app backed by America’s largest banks. As his financial stability is threatened, he echoes a sentiment that many fraud victims share, accountability should not fall on the victim.

  The issue of digital payment fraud has caught the attention of Congress as Americans report losing a staggering $10 billion through Zelle fraud in 2023 alone. One senator has described Zelle as the “dirty little secret” of American banks.

  The victim shared his frustration, revealing his bank statements and detailing the five unauthorized Zelle transactions from May. These transactions, ranging from $95 to $639, were debited from his account without his consent. For him, who relies on a fixed monthly income from Social Security Disability, losing over $1,400 is devastating.

  Despite disputing these transactions twice with his bank, he was told they were valid. His former bank insists he is liable for the transactions, and the amount has been sent to collections. This burden is nearly as much as his entire monthly disability check.

  Zelle, operated by the nation’s seven largest banks, is the most used peer-to-peer payment app, with transactions that are fast and, unfortunately for victims like him, permanent. Some lawmakers have criticized the banks for not doing enough to protect consumers.

  When approached about this case, the bank declined to comment on individual accounts but reiterated their efforts to educate customers on avoiding fraud. Their recommendations included only using Zelle for trusted contacts and safeguarding account login information.

  The issue highlights a critical need for better consumer protections in digital finance, especially for vulnerable individuals like this victim. As Congress and federal agencies scrutinize these practices, victims hope for accountability and change in the system that has left them unprotected.

   
• 

  Geebo 8:00 am on April 12, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), citibank ( 2 ), Scams ( 1,386 )   

  State sues banks over scam victims 

  

  By Greg Collier

  Before, we’ve recounted numerous instances in which banks pointed fingers at scam victims, alleging they were the culprits. These allegations seemed to stem from a single bank, as per anecdotal evidence. Yet, a lawsuit filed by the state of New York reveals that this bank wasn’t the sole entity engaging in such dubious treatment of its clientele.

  The narrative is familiar, a seemingly innocuous text message, purportedly from Citibank, prompts recipients to verify personal information. It’s a trap, swiftly leading to unauthorized access to bank accounts and significant financial losses.

  What’s more troubling is the response from Citibank. Despite the bank’s customers falling victim to fraudulent schemes, Citibank washes its hands of responsibility for recovering stolen funds. This stance highlights a glaring gap in consumer protection laws, leaving victims vulnerable to the predatory tactics of identity thieves.

  The lawsuit, filed by the New York Attorney General’s Office, exposes the inadequacies of existing regulations in safeguarding consumers against the evolving landscape of online fraud. While measures exist to limit losses from traditional payment methods like credit cards and checks, the same level of protection doesn’t extend to bank account transfers, which can constitute a significant portion of an individual’s savings. Identity thieves are capitalizing on this vulnerability, with imposter scams involving bank transfers skyrocketing in recent years.

  The implications of this legal dispute extend far beyond the courtroom. Victims of identity theft find themselves caught in a bureaucratic labyrinth, where the onus falls on them to prove the bank’s negligence in safeguarding their accounts.

  In the face of mounting losses and regulatory ambiguity, one thing remains clear: the need for comprehensive reforms to strengthen consumer safeguards in an increasingly digitized banking landscape. Whether through legislative action or judicial precedent, the onus is on policymakers and industry stakeholders to prioritize the security and financial well-being of consumers.

  As New York’s legal saga continues, it serves as a stark reminder of the high stakes involved in the battle against identity theft. The outcome will not only shape the fate of individual victims but also set a precedent for banks’ accountability in combating online fraud. In an age where a single click can lead to financial ruin, the pursuit of justice takes on renewed urgency.

   
• 

  Geebo 8:00 am on March 28, 2024 Permalink | Reply
  Tags: bank fraud, Chase ( 14 ), news media ( 4 ), paypal scam ( 13 ), Scams ( 1,386 )   

  News channel helps victim recover $100K from scam 

  

  By Greg Collier

  A resident of Woodridge, Illinois, found herself ensnared in a digital trap, losing nearly $100,000 to a cunning PayPal scam. However, amidst the despair, emerged a beacon of hope, her local NBC affiliate and their news department.

  The victim’s ordeal began innocuously with an unexpected email purportedly from PayPal, alleging outstanding bills totaling $650. Bewildered, she contacted the provided number for resolution, only to fall prey to a sophisticated ruse. The scammer, masquerading as PayPal support, manipulated the victim into granting remote access to her computer and divulging sensitive banking information.

  Under the guise of rectifying an error, the fraudster orchestrated a virtual sleight of hand, fabricating a $100,000 deposit into the victim’s account. Urged to return the purported excess, she unwittingly wired the entire sum to the perpetrator. The realization of her plight hit hard when her savings evaporated, leaving her emotionally and financially devastated.

  Predictably, Chase Bank was the entity to rebuff her plea for reimbursement, citing the lack of cooperation from the receiving bank. Notably, Chase Bank has a history of rejecting analogous appeals and purportedly levying accusations against victims, insinuating their complicity in the scam.

  Faced with rejections from financial institutions and the haunting specter of irreversible loss, she turned to her local NBC News channel. Less than two weeks after their intervention, this victim received the news she yearned for, that of restitution.

  Unfortunately, Chase Bank isn’t the sole institution to which victims resort to local consumer reporters for redress. Repeatedly, we’ve witnessed major national banks dismiss claims from scam victims until local news stations intervene. It’s imperative for these banks to improve their support for scam victims rather than relying on media intervention.

  If someone falls victim to this scam, prompt action is crucial to mitigate further damage. Immediately notify your bank and PayPal, informing them of the fraudulent activity. Freeze or close affected accounts to prevent additional unauthorized transactions.

  File a report with your local law enforcement agency and report the scam to the Federal Trade Commission (FTC) at FTC.gov/complaint. Include as much detail as possible about the incident.

  Change passwords for all online accounts, especially those linked to financial services. Enable two-factor authentication where available to enhance security.

  Even after taking these measures, there’s no guarantee that your bank will provide a refund. If you find yourself in this situation, you might consider reaching out to local consumer protection agencies or media consumer advocacy programs, like your local news station, for further assistance.

   
• 

  Geebo 9:00 am on February 15, 2024 Permalink | Reply
  Tags: bank fraud, bank scam ( 72 ), identity theft ( 108 ), impersonation scam ( 148 ), Scams ( 1,386 ), Wells Fargo ( 11 )   

  Widow outsmarts scammers who promised her free money 

  

  By Greg Collier

  In the murky world of scams and deceit, few tools wield as much power and allure as the promise of free money. Like a siren’s call, it draws in unsuspecting victims with tantalizing whispers of effortless wealth and financial freedom. Whether cloaked in the guise of a too-good-to-be-true investment opportunity or masked behind the facade of a generous giveaway, the allure of easy riches proves irresistible to many. Yet, beneath the veneer of generosity lies a web of manipulation and exploitation, leaving countless individuals ensnared in a cycle of deception and regret.

  Senior citizens, with their accumulated wealth and potentially diminished capacity to navigate the complexities of modern technology, are prime targets for these nefarious schemes. Exploiting their trust and often relying on their lack of familiarity with digital platforms, scammers deploy sophisticated tactics to deceive and defraud unsuspecting elders. From bogus lottery winnings to fake government grants, the promise of easy money preys upon the vulnerabilities of aging populations. As guardians of wisdom and experience, seniors become unwitting victims in the crosshairs of those who seek to exploit their goodwill and trust.

  An 80-year-old widow residing in Knoxville, Tennessee, recently found herself targeted by a deceptive ploy. Upon receiving a letter seemingly originating from Wells Fargo, she was informed of being entitled to a $1300 payment from an accidental death insurance mortgage policy. While such notifications are not uncommon, particularly for relatives of deceased individuals, this widow remained vigilant. Aware of the possibility that banks and insurance companies might only become aware of an account holder’s passing years later, prompting them to seek beneficiaries, she approached the situation with caution, avoiding potential exploitation.

  Despite recognizing the telltale signs of a scam, the widow chose to confront the perpetrators directly by dialing the provided customer service number—a course of action often advised against. Displaying a keen sense of skepticism, she posed a straightforward query to the first individual she encountered: “What account did it come out of?” Yet, the response proved evasive, leading to a succession of transfers to two additional individuals, none of whom could provide a satisfactory answer. In her astute interrogation, the widow thwarted the scammers’ attempts to deceive her.

  The method of such fraudulent schemes typically involves soliciting personal and financial information under false pretenses. Had an unsuspecting individual responded to the letter without discerning its fraudulent nature, they would likely have been coerced into divulging sensitive details, such as their Social Security number, bank account information, and other personal identifiers. Operating under the guise of facilitating the transfer of the purported funds, scammers would exploit this information for nefarious purposes, including identity theft and draining the victim’s bank account.

  If ever confronted with a similar letter, email, or text message regarding unexpected funds, exercising skepticism and prudence is paramount. While it’s prudent to largely ignore such correspondence, if there’s even a slight possibility of legitimacy, it’s wise to independently verify the information. Instead of relying on the contact details provided in the message, seeking out the official customer service number from the company’s website ensures direct communication with legitimate representatives, minimizing the risk of falling victim to a scammer’s tactics. By taking these precautionary measures, individuals can safeguard themselves against potential financial exploitation and identity theft.