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  • Geebo 9:11 am on December 11, 2024 Permalink | Reply
    Tags: , banks, ,   

    Check Washing is a Growing Financial Threat 

    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 8:00 am on October 10, 2024 Permalink | Reply
    Tags: , banks, ,   

    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: , , banks, , ,   

    Banker Who Fell Victim to Scam Gets Prison Time 

    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 9:00 am on December 18, 2023 Permalink | Reply
    Tags: banks, , , ,   

    Scam victim sues bank over pop-up scam 

    By Greg Collier

    Before we get started with today’s story, we wanted to share an article with you from the New York Times. The article shows that many overseas scammers are victims themselves. According to the Times, English speakers in East Asia are being offered translation jobs. In reality, the victims are being kidnapped and trafficked to forced labor camps, where they’re coerced into committing pig butchering scams to gain their freedom. It seems scams have even more victims than you may have originally thought.

    But speaking of overseas scams, today’s story involves an elderly woman who wired $120,000 to scammers in Hong Kong. Unfortunately, she fell victim to the pop-up scam, also known as a tech support scam.

    The victim was using her computer when she received a pop-up telling her that her computer had been hacked. The pop-up contained a phone number for the victim to call immediately. While the news report does not specify, in many of these cases, the scammers will mention to their victims that since their computer has been hacked, their bank accounts are at risk from hackers. Then the victim is instructed to move their money to protect it. In this instance, the victim wired her money overseas.

    The victim is now suing her bank, claiming the bank should have at least questioned the transactions before allowing them to go through. According to the victim’s attorney, the victim never made a wire transfer before, let alone one for such a large amount that was going overseas. Typically, when bank scams like this happen, the banks try to wash their hands of the matter by saying since the victim authorized the transaction so it’s not the bank’s responsibility.

    What do you think? Do you believe the banks share some responsibility for failing to prevent these transactions, or is the elderly woman simply an unfortunate victim?

    If you do receive one of these pop-ups, do not click on anything within the pop-up. Instead, close the browser or restart your computer. Avoid providing any personal information or following any instructions in the pop-up. Consider running a reputable antivirus or anti-malware scan to ensure your system’s security.

     

  • Geebo 8:00 am on September 28, 2023 Permalink | Reply
    Tags: , banks, , ,   

    Bank closes after falling to crypto scam 

    Bank closes after falling to crypto scam

    By Greg Collier

    A small but successful bank in Southwestern Kansas recently closed its doors after losing $12 million to a cryptocurrency scam. It was one of only two banks in its rural Kansas town, and its loss could be devastating to the local community’s economy. The bank was known for working with farmers in the community who may no longer have that resource available to them. Thankfully, the bank’s customers are protected mostly by the Federal Deposit Insurance Corporation (FDIC), bank shareholders are left holding the bag. So, what scam caused the bank to collapse? It’s believed to have been the pig butchering scam.

    The pig butchering scam is when a scammer convinces their victim to invest in cryptocurrency through a phony exchange. The victim will be led to believe their initial investment has exponentially grown. However, when the victim tries to withdraw their money from the exchange, they’ll be told they need to pay an additional fee, which can be as much as the initial investment.

    Typically, we discuss the pig butchering scam as a version of the romance scam, but it doesn’t have to always be so salacious. It can be as simple as someone you’ve recently met suggesting you should invest in cryptocurrency.

    It’s unclear if that’s what happened in the Kansas town, since the bank’s collapse is still under investigation. However, what is known is that the bank’s CEO allegedly asked a client for a $12 million loan, so he could get his money out of a cryptocurrency investment. The client was said to be assured that the investment wasn’t made with the bank’s money. The CEO is said to have told his client he ‘knew someone’ who was helping him invest in crypto, but there was an issue with the payment, and he needed to put more money back in. Again, we can’t say for sure, but this sounds like the typical script for the pig butchering scam.

    The bank CEO was no shady dealer either. He was a known pillar of the community who was trusted by clients and customers alike. If we had to hazard a guess, it sounds like someone got into his ear and tricked him into the scam. Unfortunately, it was to the tune of $12 million.

    The point to this blog post is twofold. The first is, no matter who you are and how experienced you are in your respective field, anyone can fall for a scam. The second is that scams can not only have a devastating personal effect, but can devastate a community if someone isn’t careful.

    The crypto world is crazy enough without scammers trying to take your money. Only dive into crypto if you’ve done your homework. If someone you’ve never met face-to-face starts pushing you to invest with their so-called “expert” advice, chances are they’re not legit.

     

  • Geebo 8:00 am on July 31, 2023 Permalink | Reply
    Tags: , banks, , , ,   

    Do banks only help scam victims when the news gets involved? 

    Do banks only help scam victims when the news gets involved?

    By Greg Collier

    When we started posting about Zelle scams is when we first discovered how unhelpful banks can be when it comes to those who fell victim to these scams. Scammers will walk the victim through the Zelle app to have them transfer money to the scammers under false pretenses. Since the victim made the actual transaction, many banks will tell the victim they can’t get their money back. To the bank, or so they claim, the transaction looks authentic to them, so they can’t issue a refund to the victim.

    However, occasionally, victims will have their money returned to them after they tell their story to their local media. This typically involves the victim going to their local TV news consumer reporter. In turn, the reporter asks the bank for comment, which more often than not results in the bank issuing a refund.

    For example, a Massachusetts woman recently fell for a scam which resulted in her bank account being emptied by scammers. She received a call from scammers who were posing as PayPal to tell her there was in issue with her account. The scammers sent her a link to click on, and when she did, scammers took control of her phone. Before she knew it, $3500 was gone from her bank account.

    Her bank allegedly denied her claim until her local news station got involved. The bank reportedly claimed they reversed their decision after their decision after the victim provided additional information.

    But are these bank refunds a result of the plane crash principle? The principle says that we only hear about the planes that crash, but we don’t hear about the vast majority of planes that continually land safely.

    Are banks issuing refunds to scam victims without the media getting involved? We’d like to think they are, but somehow, we doubt it. As someone once told us, banks are in the business of making money, not issuing refunds. Not to mention, if banks started issuing refunds on demand to scam victims, it won’t be long before scammers start claiming they’ve been the victims of scams.

    The banks need to implement better initiatives to protect their customers from scammers. Education has not been enough, as scammers often intimidate their victims into ignoring the education. If just one major bank came forward with a new program to protect their customers from scammers, we’re sure it would not only be great PR for them, but they would probably attract many new customers.

    However, it will most likely be a long time before that happens. In the meantime, we need to look out for ourselves. If you receive a phone call from any company related to money, like PayPal, Zelle, Venmo, or even your own bank, hang up, and call them back at the company’s official customer service number. You can find these numbers, if the company has one, on their website under the contact section.

     

  • Geebo 8:00 am on October 12, 2021 Permalink | Reply
    Tags: banks, , , ,   

    Should banks be held responsible when the elderly are scammed? 

    Should banks be held responsible when the elderly are scammed?

    By Greg Collier

    An interesting legal issue has arisen in Florida, and it deals with one of the more common scams, where the elderly are usually the targets. Of course, we’re talking about the grandparent scam where scammers call the elderly to tell them that one of their grandchildren is in trouble, and they need money. This scam has claimed far too many elderly victims. However, there have been instances where banks have intervened on their customer’s behalf. Some banks have trained their employees to ask their customers questions about large or frequent withdrawals if they believe the customer might be the victim of a scam. The issue at hand here is just how responsible banks should be when it comes to protecting their customers like this?

    An elderly woman in Tampa lost $700,000 to scammers who had convinced her that her granddaughter had been in a car accident and was in legal trouble. One of the scammers posed as her granddaughter and told the woman not to tell anyone else in the family. Another scammer got on the line posing as a local attorney. As most of these scams start out, the first request was for bail money. Then more requests came in stating that money needed to be paid to the people who were supposedly injured in the accident.

    This resulted in 13 withdrawals from her bank. In some instances, the victim was instructed to leave packages of cash for couriers to pick up. The bank did ask why the woman was withdrawing so much money, but she told the bank she was renovating her home and paying a contractor who preferred to be paid in cash. This is what the scammers told her to tell the bank if they started asking questions. It’s been reported that someone did call the state’s abuse hotline, but the woman was allowed to keep withdrawing large sums of cash after the call was made.

    The victim has since sued the bank for negligence. So what do you think? Did the bank do its due diligence, or should they even be required to do so? Or is this just an unfortunate collision of coincidences that allowed the scammers to prosper?

     

    • Wally 9:54 pm on October 20, 2021 Permalink

      I’m on the fence with this. I worked for a small bank for 8 years and really enjoyed my customers. However, one challenge that you always are scammers trying to customer’s money. Some people come into the back saying they need to withdraw X amount or do cashier’s checks to send people they don’t know.

      As a previous banker I would always ask multiple times why they are sending the money and to whom and try to deter them as much as possible and even get managers involved. Some customers [not all] will realize that it’s a scam while others will question you as the banker why you won’t give them their money so they can do what they want. I truly feel really sorry for anyone who is scammed out of their hard earned money. I have sometime refused to handle many transactions if a client refuses to take our advise.

      Banking is becoming more and more riskier everyday and I have seen it cripple some banks wit the losses they have suffer being in some installs they may have to reimburse their clients up to FDIC limits. But again, I think it’s TERRIBLE for the elderly or anyone to be scammed.

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