Mobile check deposit has increasingly become a norm for people to deposit checks and for banks to process. By simply taking a picture and uploading the image(s), people can deposit their funds on the go, allowing them to skip the line at the bank or ATM. The check is deposited without having to visit a branch and people can go about their business.
But, as with any new service and growing trend, there are bad actors and scammers out there looking to take advantage of the new technology. People need to be well-informed about the potential for fraud with mobile check deposit. Scammers are finding new ways to infiltrate these systems and devise new check scams while at the same time posing as employers or lenders.
This not only puts customers in the line of fire, causing them to lose not only their check and also giving up access to their accounts, but also creates a chasm in financial institutions’ security systems.
Here’s what you need to know about mobile fraud scams and how they can be limited and protected against.
How This Works
Malware and phishing scams are on the rise, and with the advent of mobile payment systems, such as Zelle, Venmo, and CashApp, people are seeing more potential for losses at the hands of fraudsters.
For mobile deposit scams, fraudsters contact their victims through email or social media apps posing as a potential employer or lender. This can be done through posting a job advertisement and the fraudster will usually provide the victim with an opportunity to earn some money quickly by depositing a check to their account or by asking for help in moving money to global areas. The scammer will make further requests to gain access to a bank account and may even ask for login information to online banking portals.
From here, fraudsters use the information they gain to deposit a fake check which in turn allows them to request funds to be immediately transferred back to them by way of money order or wire transfer.
Protecting Against Fraud
For banks and credit unions, this kind of fraud can be protected against by promoting education around wire fraud and mobile deposit fraud. Customers should never give out personal information of any kind to strangers, including their PIN, account number, or any login information. If they are offered money in exchange for personal information, they should know it’s more than likely a scam.
Also, customers should also check their online bank statements on a regular basis to look for any unfamiliar activity.
For banks and other financial institutions, investing in bank crime insurance, including wire fraud coverage, can protect against these scams and other financial scams like them. Bank crime insurance can help to provide the financial back up when scams like this are executed. Legal fees can be expensive and making up for lost funds from customers can sideline a bank. Having bank crime insurance will provide a much-needed backstop when replacing funds needs to take place.
Also, insurance of this kind can also provide the ability to work with authorities and IT professionals to re-patch systems and protect against future issues like wire fraud and mobile deposit fraud.
About Financial Guaranty Insurance Brokers
Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.