Scams You Can Bank On

MarketWatch

Frauds targeting bank accounts are on the upswing; here's what you can do

As if the negative repercussions of the global financial crisis weren't enough, now savers have something new to worry about: Scams targeting bank accounts are on the rise.

One of the newest frauds involves recruiting unsuspecting job-seekers to help launder money. Those hired become "mules" -- people who never know they're collaborating with fraudsters, says Uri Rivner, who heads new anti-fraud technology for RSA, a division of EMC Corp., in Hopkinton, Mass.

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The job postings seem legitimate; often the company has a professional-looking corporate Web site. The jobs may involve wiring money out of the country through an international wire agent. Or reshipping computers and other merchandise -- perhaps purchased originally with a stolen credit card.

According to Rivner, when victims at one job Web site clicked on the "careers" tab, they were invited to apply for a job as a regional manager in the U.S. responsible for shipping merchandise. The offer by the company, promising a great salary for little work, involved repackaging and shipping merchandise, supposedly obtained from an e-commerce Web site overseas.

More than 1,900 job-hungry Americans applied. Of those, 33 were hired as actual "mules." After a few weeks, some became victims of identity theft because they had provided personal information, including social security numbers, on the fake job application. Those stolen identities were used to commit check fraud and other financial crimes.

Not So Friendly

Another hot scam, Rivner says: Fraudsters gain access to the names of your friends on social networking sites, like MySpace.com, and invite you to click on a hyperlink to view a funny video. Victims figure they know the sender, so they click to watch. Then their screen freezes, and they get a message telling them their video player needs upgrading.

Click to upgrade, however, and you have just accepted a Trojan horse, which follows your movements online. Through it, scammers can capture personal information, including credit card numbers, social security numbers and even online check photographs when you conduct business online.

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"Malware and Trojans [are] distributed on a massive scale," Rivner says.

Other illegal banking activities also are increasing. Identity theft increased 22% to nearly 10 million victims in 2008, according to Javelin Strategy & Research, a Pleasanton, Calif.-based research firm. And the Federal Trade Commission clocked 313,982 identity-theft complaints, up from 215,000 in 2003.

Meanwhile, more than 5 million U.S. consumers lost money to "phishing" attacks in the year ending September 2008, a 40% increase over the number of victims a year earlier, according to Stamford, Conn.-based research firm Gartner Inc.

Even bank robberies, burglaries and thefts are rising, with 1,645 occurring in the last quarter of 2008, according to the FBI. The upward trend continued into 2009.

The most disturbing trend is that many financial frauds may be interconnected.

"Everything is linked," Rivner says. "It could be the same people. It could be the same resources, or the same mule accounts." Also linked, he says: Online and offline fraud.

On average, 44% of a community bank's check fraud losses could be attributed to organized crime rings, the American Bankers Association reported.

The Financial Crimes Enforcement Network, a federal agency established to safeguard the financial system, reported in March that in some cases of mortgage fraud, the scammers are connected to other types of financial crimes, including check fraud, money laundering, stock manipulation, suspicious documents and forgery.

The FCEN says banks have become better at tracking suspected mortgage fraud through mandated recordkeeping. Plus, law enforcement agencies are cooperating more to catch these crooks. But how can the FCEN detect activities involving mules who never even realize they're laundering money? Key factors, according to Bill Grassano, an FCEN spokesman, include whether there is interaction with a financial institution, and what resources and leads a law enforcement investigator has.

What You Can Do

To protect yourself, consider the following tips:

  • Be skeptical of messages urging you to upgrade programs or download anything, even if you think you know the person.
  • Upgrade antivirus software, personal firewalls and browsers. Let your operating system accept automatic patches with updates.
  • Don't respond to work-at-home ads or promises of money or returns that sound too good to be true.
  • Be wary of providing personal information to people you don't know.
  • Check credit reports annually for free, only at AnnualCreditReport.com. See the site.
  • Before cashing checks and money orders from people you don't know, verify funds exist in the account at the issuing financial institution.
  • Avoid paying upfront fees before an expected service is performed.
  • Carefully monitor bank and investment statements for evidence of fraud, and immediately report anything suspicious.
  • Don't click on email hyperlinks.
  • Change passwords often.
  • Avoid your bank branch between 9 a.m. and 11 a.m. and on Fridays, when the FBI says most bank robberies occur.

Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Quick Steps to Financial Stability" (Que/Penguin). You can contact them at www.moneycouple.com.

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