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4 common kinds of bank fraud

On Behalf of | Jun 20, 2023 | bank fraud | 0 comments

Bank fraud is a criminal offense that involves using deceptive means to receive money, assets or other property owned or held by a bank. This crime has grown significantly with the advent of digital banking and continues to evolve as technology becomes more advanced.

Fraudsters employ a range of sophisticated techniques that can make it difficult to detect their illegal activities. You can protect yourself more effectively by understanding the common examples of bank fraud.

1. Impersonation and identity theft

Impersonation, or identity theft, is one of the most common forms of bank fraud. In 2022, 43.7% of identity fraud cases were credit card fraud cases. For identity theft, fraudsters steal your personal information and pose as you to gain access to your bank account. They may withdraw money, make purchases or even open new credit cards in your name.

These criminals often obtain your information through methods like phishing, where they trick you into entering your bank details on a fake website or email. Always verify the source before sharing any personal information.

2. Forgery and alteration of financial instruments

Forgery involves creating fake financial instruments like checks or bank drafts, while alteration refers to changing the details of a legitimate financial instrument. For example, a fraudster may alter the amount on a check, causing the bank to release more money than you intended.

Check your financial instruments thoroughly before issuing them, and monitor your account regularly to detect any unusual activity.

3. Fraudulent loans

In a fraudulent loan scheme, the criminal takes out a loan using false information. This could involve falsifying income details or using someone else’s identity. The fraudster has no intention of paying back the loan, leaving the bank at a loss.

Protect your personal information and report any suspicious activity to prevent others from taking out loans in your name.

4. Fraudulent deposits

Fraudsters can also trick banks through fraudulent deposits. They deposit fake checks into their account and withdraw the money before the bank discovers the fraud. This technique often involves overseas banks, making it difficult for the home bank to recover the funds.

Avoid accepting checks from unknown sources, especially from overseas, to protect yourself from this type of fraud.

Being aware of these types of bank fraud can help you stay one step ahead of fraudsters. Always protect your personal information, be wary of unusual requests or offers and report any suspicious activity to your bank immediately.

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