Banking Scams: Beware Fraudsters Impersonating Your Bank

Scams — and the criminals behind them — are getting more creative in separating victims from their money.

Yellow warning tapes with writing saying fraud.
(Image credit: Getty Images)

Consumer scams are getting more and more creative with every year that goes by. The Federal Trade Commission (opens in new tab) (FTC) reported that consumers lost more than $5.8 billion to fraudsters in 2021, an increase of more than 70 percent over the previous year. And the data for 2022 is expected to be even higher when it's released, as criminals experiment with more intricate and inventive scams.

One of the latest technology-aided gambits involves scammers contacting you pretending to be your bank, in order to steal sensitive data and take over your accounts. So how do these scams work, and how can you protect yourself? 

Bank spoof scams: How they work

The Detroit Free Press (opens in new tab) reports on a recent surge in scammers targeting checking accounts and bank accounts, particularly during the recent holiday shopping rush. The latest trend is to impersonate or “spoof” bank fraud departments. 

Scammers and criminal gangs reach out to potential victims via fake text messages, phishing emails, or telephone calls — both live and pre-recorded. Once they’ve successfully impersonated the victim’s bank, scammers hope to confuse their mark into believing fictional stories about crooks hacking into their bank accounts. 

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The scammer tries to convince the victim to reveal personal information or to click on fraudulent links to help “stop the crooks” when, of course, the scammer’s real goal is to take over their bank account themselves. 

Scammers use these fake, urgent warnings to panic you into acting before you have time to think, according to the FTC (opens in new tab). This “fight or flight” feeling is what helps scammers achieve their goals — and it usually succeeds unless potential victims understand how to protect themselves. 

The American Bankers Association (opens in new tab) reports that scammers also attempt intricate phishing attempts to trick consumers into using person-to-person payment apps to transfer money to the crooks, under the guise of a legitimate business or someone you trust. Criminal gangs usually already have some of their intended victim's personal details, often gained through a data breach, which they use to make the scam harder to detect. 

PayPal, Venmo, CashApp and Zelle are the preferred money-transfer apps for scammers. According to the Consumer Financial Protection Bureau (opens in new tab) (CFPB), consumers lost $130 million in 2021 by mistakenly sending money to scammers via these payment apps or similar services.

How to protect yourself

To guard against these types of scams, follow a few cardinal rules from the CFPB (opens in new tab)

  • Never trust Caller ID, especially when they ask for private information. Banks will never call and ask you for that info over the phone, to avoid this exact scenario.
  • Worried that a call or message is fake? Don't use the number provided. Instead, reach out to your bank or credit card company via their mobile app or via their official phone number, which is usually located on bank statements and on the back of your credit or debit card.
  • Never share passwords or numbers for Social Security, credit cards, or bank accounts.
  • Never send money to someone you don’t know. If you think you sent money to a scammer, contact your bank or the payment app operator you used to report a potential mistake and hopefully recover your funds (opens in new tab).
  • Put your number on the National Do Not Call Registry (opens in new tab) to avoid robocalls from scammers. Go to www.donotcall.gov (opens in new tab) or call (888) 382-1222.
  • Submit complaints about scammers and fraudulent activities to www.consumerfinance.gov/complaint (opens in new tab).

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Audience Engagement Manager, Kiplinger.com

Ben Demers manages audience engagement and social media for Kiplinger.com. He joined Kiplinger in May 2017.