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Here’s why YOU Are the Best at Fighting Fraud

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Fraud targeting consumers continues to get attention in the media. Articles in newspapers and magazines, along with postings in social media, discuss the steady increase in fraud activity over the last few years and the financial toll this takes on the average consumer. Fraudsters grow more sophisticated in their attacks, increasingly using technology, employing organized strategies, targeting multiple people with the same scams at the same time, and repeating anything that has successfully exploited anyone.

Local and federal law enforcement pursue fraud rings when these can be identified, but where is consumer fraud most effectively stopped? Before it happens! Prevention starts with the common-sense practices of consumers.

Fraud fighting professionals hear the stories of individuals who are victims of financial scams. Hopefully, those first-hand accounts are being shared with friends and family so there can be collective learning from such experiences. These cautionary tales create a bigger impression in someone’s mind when they know that such bad events really happened and did so to someone they know.

Real stories that have been shared with regulatory agencies such as the Consumer Financial Protection Bureau (CFPB) about attempted or perpetrated financial scams by the targets of such schemes have included the following:

  • Depositing a Check for a “Friend” 

    Victims of this fraud have acknowledged depositing a check for a new friend into their account without knowing enough about this recent acquaintance or what the nature and origin of the check was. The victims did not carefully consider the credibility of this person (i.e., the fraudster) who said they did not have a bank account and asked for access to the victim’s accounts.

    The fraudster asked that most of the funds be forwarded to them quickly – usually through a cash application or account-to-account (A2A) transfer – but in return for the favor allowed the account holder to keep some amount (between 10 – 25%) of the face of the check as a form of payment for providing a place to deposit the check. However, the victims found the check deposited to be fraudulent, so there was no compensation to them, and the amount sent to the fraudsters became losses in these accounts.

  • Buying Gift Cards for Payments

    Consumers have warned about being targeted for scams that require them (the victims) to purchase gift cards – which are non-traceable – to use as a form of payment. Victims have described multiple different scenarios where such a scheme occurred, including:

    • Someone who offered to consolidate personal debt sent the victim a large check for them to pay off credit cards, but the amount of the consolidation payment was for more than what was asked. The consumers were instructed to send back the excess money to the “debt consolidator” (the fraudster) in the form of gift cards. The debt consolidation check bounced.
    • Government agencies (local and federal) called and said that a long outstanding tax liability was due and that it had to be paid immediately, and the form of the payment had to be gift cards. 
    • A job offer was made for a fully remote position and a check was sent to the new recruit to buy equipment and office supplies. This advance is for greater than the cost of the office equipment, and the new employer (the fraudster) instructed the excess monies to be sent back as gift cards. Victims of this scam have reported finding shortly thereafter that there was no job or employer, the advance check was bad, and they lost money both on the equipment purchased and the gift cards sent.
  • Revealing a Password when Receiving a Call from your Financial Institution

    Repeated incidents have been recalled by account holders at multiple financial institutions (FIs) where they have received a phone call allegedly from their FI. The call was reportedly checking into possible account takeover of the members’ online banking account and within the context of that conversation the FI representative asked the account holder to confirm their password.

    The problem is, FI’s do not request account holders’ passwords. Victims of this scam have explained that they gave their password to fraudsters impersonating their FI by spoofing the phone number. Consumers who have not fallen for this scheme have described their response as declining to provide a password and telling the alleged FI representative that they (the account holder) are going to hang up call the FI back.

    The account holders then went to the FI’s website and called the number for the contact center/ customer service team that was listed there. Through those calls to the FI initiated by the account holders, they were able to determine that the first calls were not real.

  • Becoming Romantically Involved with Someone Online and Offshore

    Consumers have discussed falling for scams involving connecting with someone for whom they never met directly. Victims of these scams have talked about making emotional decisions throughout those relationships. This included offering to help financially when their faraway love interest discussed having to pay off debt before they could come to America. Money was sent overseas by the well-meaning, lovestruck targets, believing this was the next stage of their life together with this new love (the fraudster-fiancé).

    The victims acknowledged the heartbreak and negative financial impact when these remote relationships ended abruptly and the fraudster-fiancé stopped responding to any form of message after receiving money.

  • Trying to Help a Family Member out of Trouble

    Grandparents targeted by fraudsters have discussed receiving calls late at night from a person claiming to be a grandchild. They plead urgently that they need money sent by Zelle (or other cash application) to them immediately because there is a situation (such as a need for bail to get out of jail) that they need help with but are embarrassed to reach out directly to their parents.

    These grandparents avoided sending money in instances where they could rely on unique elements of their relationship with their grandchildren, such as the use of special nicknames, to recognize that the voice on the other end of the phone was not legitimate.

Consumers willing to share these personal stories – as victims or just targets of fraud – help others when they are confronted with similar schemes.  Everyone who has had such experiences is encouraged to share with family and friends.