Consumer scams are getting more creative every year. It Federal Trade Commission (opens in new tab) (FTC) reported that consumers lost more than $5.8 billion to fraud in 2021, an increase of more than 70 percent from the previous year. And the 2022 figures are expected to be even higher when they are released as criminals experiment with more sophisticated and inventive scams.
One of the latest tech-enabled scams involves scammers contacting you pretending to be your bank in order to steal sensitive data and take over your accounts. So how do these scams work and how can you protect yourself?
Bank frauds. how do they work?
It Detroit Free Press (opens in new tab) reports a recent surge in scams targeting checking and bank accounts, especially during the recent holiday shopping rush. A recent trend is to impersonate or “spoof” bank fraud departments.
Scammers and criminal gangs contact potential victims through fake text messages, phishing emails or phone calls, either live or pre-recorded. Once they successfully impersonate the victim’s bank, the fraudsters hope to confuse their mark and believe the fabricated stories that the fraudsters hacked their bank accounts.
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The scammer tries to convince the victim to reveal personal information or click on fake links to help “stop the scammers”, when of course the scammers’ real aim is to take over their bank account.
Scammers use these false, urgent warnings to scare you before you have time to think, according to the FTC. (opens in new tab). This “fight or flight” feeling is what helps scammers achieve their goals, and they usually succeed as long as potential victims don’t understand how to protect themselves.
It American Bankers Association (opens in new tab) reports that scammers are also attempting fraudulent phishing attempts to trick consumers into using peer-to-peer payment apps to wire money to scammers under the guise of a legitimate business or someone you trust. Criminal gangs usually already have some of their intended victim’s personal information, often obtained through a data breach, which they use to make fraud more difficult to detect.
PayPal, Venmo, CashApp, and Zelle are the preferred money transfer apps for scammers. By: Consumer Financial Protection Bureau (opens in new tab) (CFPB), consumers lost $130 million in 2021 by mistakenly sending money to fraudsters through these payment apps or similar services.
How to protect yourself
To protect yourself from these types of scams, follow a few basic rules CFPB (opens in new tab):
- Never trust Caller ID, especially when they ask for personal information. Banks will never call and ask you for that information over the phone to avoid this very scenario.
- Worried that the call or message is fake? Do not use the specified number. Instead, contact your bank or credit card company through a mobile app or official phone number, usually found on your bank statements and on the back of your credit or debit card.
- Never share social security, credit card, or bank account passwords or numbers.
- Never send money to someone you don’t know. If you think you’ve sent money to a fraudster, contact your bank or the operator of the payment app you used to report the potential error and hopefully recover your funds (opens in new tab).
- Enter your number National Do Not Call Registry (opens in new tab) to avoid scammers from scammers. to go www.donotcall.gov (opens in new tab) or call (888) 382-1222.
- File complaints about fraudsters and fraudulent activity www.consumerfinance.gov/complaint (opens in new tab).
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