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May 31, 2017
As a part of our ongoing effort to help our members protect their accounts, we wanted to let you know about a recent scam that’s been occurring in our local community.
How the Scam Works
A fraudster convinces a person to open an account at a bank or credit union, then asks the victim to hand over the debit card and PIN number. The fraudster uses the information to deposit a fake check, and then withdraws the money before the financial institution knows the check is bad.
The victim is told that the bank or credit union is insured and that the victim won’t be responsible for the bad check. “The bank [or credit union] will get their money back, don’t worry,” is the phrase most commonly spoken. In return for opening the account and handing over the debit card, the victim is paid a fee by the fraudster.
When the check comes back fraudulent, the victim is left owing the financial institution money and is held responsible for the fraud, regardless of whether or not the bank or credit union is insured.
If you give your personal and/or banking information accidentally or purposefully to someone who uses your information to commit a fraudulent act, you are responsible for that activity on your account – not the financial institution. Avoid falling prey to these scams by following these few simple steps:
- Never give out personal or banking information. This includes your debit card number, PIN, account number, and any online or mobile banking login information. If you do, and it’s used fraudulently, you will be held responsible.
- If you are offered money in exchange for your personal information, it’s likely a scam. Don’t proceed. Scammers could leave you owing thousands and these unpaid balances will be sent to a collections agency.
- It’s safer to accept cash, a cashier’s check, or PayPal from someone you don’t know well. If you must accept a check, remember it takes several days for a check to fully clear, even if the funds are not on hold. Until the check clears, you are responsible for any funds withdrawn against it.
If You Suspect Fraud
If you believe you have been the victim of fraud, contact your local police department immediately and notify your financial institution as soon as possible. They can place additional safeguards on your account.
Remember, regardless of whether the bank or credit union is insured, you are ultimately responsible for the activity in a bank account that you opened. If you deposit a counterfeit check, it will end up being your responsibility until the fraudsters are prosecuted, if ever. In the end, it’s best to not take chances.