Bank Account Fraud and Scams

Know what to look for to avoid becoming a victim of bank account fraud and learn how to spot scams.

How Bank Account Fraud Works

Typically, someone you don’t know approaches you with a request that involves cashing a check or depositing it into your bank account and then asks you to use a portion of that money for what appears to be a legitimate purpose.

Scammers are counting on you to believe that once you deposit or cash a check, it has “cleared” and cannot be returned unpaid. When you deposit or cash any check, your bank forwards that check to the bank on which it was written for payment.  If the paying bank discovers a check is fraudulent, it will return the check to your bank without paying it. The deposit will be reversed from your account.  You are responsible for the full amount of the original check and any associated fees. It may take a period of time for a check to be discovered as fraudulent and returned to your bank.

How to Recognize Bank Account Fraud

Scammers want to distract you from taking the time to consider whether or not their check, money order, U.S. postal money order or other item is legitimate.   They accomplish this by providing a believable and compelling offer to convince you to immediately give away money from your account before their check can be returned as fraudulent.  There are many variations of bank account fraud. These scams frequently target individuals who are looking for job or dating opportunities, selling items, or seeking to help someone in need.

See the Scams tab for more detailed descriptions.  Familiarize yourself with some of these common scams so that you may be able to spot attempts to commit bank account fraud.

How to Protect Yourself Against Bank Account Fraud

The best defense against bank account fraud is awareness. Review these tips to know what to look for:

  • Use common sense. If it sounds too good to be true, it probably is.
  • Be suspicious if you are asked to deposit or cash a check and immediately give or wire a portion of the funds.
  • Remember that you are responsible and liable for items you cash or deposit into your account.  It may take time for a fraudulent check to be discovered and returned to your bank.
    • Be very cautious when depositing or cashing checks from individuals or businesses you do not know well or with whom you have only interacted online.
    • Do not accept payments for more than the total amount of a sale with the expectation that you send the buyer the difference.
    • Do not accept jobs in which you are paid or receive commission for facilitating money transfers through your account.
    • Do not accept work arrangements or sweepstakes proceeds that require you to deposit a check and send back a portion of the funds for training materials, taxes or fees.
    • Look for typos, discrepancies, and misspellings on checks and other documentation – they are red flags for potential fraud.
  • Never be shy about asking for verification or independently researching an individual, company or check.
  • Always ask your banker for assistance if you have any concerns about a check you are depositing or cashing.
  • Remember that a wire transfer is an immediate form of payment. Once a scammer has obtained the funds you have wired in exchange for a check, the wire transfer cannot be reversed, even if the check was fraudulent.
  • Be wary of strangers who initiate a friendly conversation and eventually move to a discussion regarding a financial opportunity or need that requires you to deposit a check, wire money or share an account or credit card number.
  • Never give personal information to a stranger who contacts you by telephone, email, or other means. This includes your Social Security number, bank account information, online banking credentials, and credit or debit card numbers.
  • Never try to lead on a scammer with the intention of “catching” them or getting back at them.  You may unintentionally provide the scammer with additional information that can be used to further defraud you.

Fraudsters are clever and constantly devise new fraud scams.  However, a basic pattern usually involves a request to cash or deposit a check or other item and then immediately give away a portion of that money to the fraudster.  Eventually, the check or other item is discovered as fraudulent and your bank will hold you responsible to pay back the money you gave to the fraudster, along with any additional fees incurred during the transaction. In some scams, fraudsters may also to encourage you to share personal or financial information that can be used to defraud you.

Familiarize yourself with these common scenarios to learn how fraudulent transactions take place. Would you be able to spot these scams?

Award Scams

Lottery or Sweepstakes Scam

Description: Congratulations – you’ve just won a foreign lottery.  You receive a letter with a large-dollar check that you are asked to deposit into your personal checking account.  However, you need to immediately wire a portion of the funds to a foreign bank account to cover various taxes and administrative fees.

Tips:  Legitimate lotteries pay taxes directly to the government rather than being reimbursed from winners’ proceeds. It is against U.S. law to play a foreign lottery by mail or by telephone.  To learn more about international lottery scams visit the Federal Trade Commission website.

Government Grant Scam

Description:  A phone call from a “government agency” congratulates you on being awarded a free grant for paying your taxes on time.  The caller asks for your checking account number so the grant can be deposited and “one-time processing fees” automatically withdrawn.

Tips: Government agencies do not spontaneously award free grants.  Typically, individuals must apply for government grants.  Do not give your bank account information to individuals, companies, or agencies if you are unable to verify the request is legitimate. Be especially cautious if you did not initiate the call.

Personal Scams

Online Romance/Dating/Friendship Scam

Description: A participant in an international online dating site begins communicating with you via Instant Messaging (IM). In the course of discussion, he mentions some personal financial difficulties that would be solved if he could just find a way to cash a U.S. check that he has been unable to cash.  Could you wire the funds to an account where he can pick up the cash?  He will mail you the endorsed check and you can deposit the full amount into your checking account.

Tips: If you are using an online dating site, be careful of individuals you’ve just met who want to immediately leave the site and move to personal email or Instant Messaging (IM) communication.  Be particularly vigilant if the talk turns to personal financial problems that require your help.  Never give personal or financial information such as account numbers or credit card numbers.  To learn more about dating and romance scams, visit the U.S. Department of State website.

A Stranger in Need

Description: Someone you don’t know well or just recently met tells you that she doesn’t have a bank account and the bank won’t cash her check.  Could you deposit the check into your account and give her the cash?  She’ll give you $20 from the check for your trouble.

Tips:  Always be suspicious of anyone who needs you to cash a check on his or her behalf.  Remember that you will ultimately be responsible for the full amount of the check and any associated fees if it is returned unpaid by the bank.

Job Scams

Work-at-Home / Work-Out-of-the-Home Scam

Description: You respond to an email with a work-at-home employment offer.  The employer sends a check with your first month’s salary and money to purchase the supplies you will need to complete the work.  The employer asks you to deposit your paycheck but wire a portion of this first check to another account to cover the cost of your “one-time certification” and the training materials that will arrive next week.

Tips:  Offers to perform minimal work from home for a lot of money are typically scams. No legitimate work-at-home company sends its workers money in advance and asks them to send a portion to a third party via wire transfer or any other means.  Do not accept any work-at-home opportunities that involve processing checks or electronic payments through your personal account.

Mystery Shopping Scam

Description:  You answer an advertisement about an opportunity to earn money by being a mystery shopper (anonymously visiting businesses to evaluate their services).  In a few days, you receive a package containing instructions and evaluation forms for your first mystery shopping assignment.  You also receive a check that includes both your salary and the cash you will use in your mystery shopping assignment.  You are instructed to deposit the check to your personal account and withdraw cash to take to the local office of a well-known money transfer service.  You will wire this money to another bank account so that you can evaluate the office’s customer service.

Tips: You should not wire money as part of a mystery shopping assignment.  No legitimate mystery shopping company sends its shoppers money in advance and asks them to return a portion via wire transfer or any other means.  A database of actual mystery shopping companies and assignments is provided by the Mystery Shopping Providers Association (MSPA).

Sales and Service Scams

Overpayment

Description: You are selling an item via an online auction.  The winning bidder mails a cashier’s check for more than the final sales amount.  The buyer indicates that this was a simple mistake.  To save time and trouble, he asks you to go ahead and deposit the full amount but wire him the difference.

Tips:  If you are selling an item or renting property, never accept a check for more than the purchase or rental amount.  Scammers can make fraudulent cashier’s checks look authentic and hope unsuspecting sellers trust that the cashier’s check is legitimate. 

Service Scam

Description:  You receive a telephone call from what seems to be a legitimate company.   There are problems with your account and the company simply needs to verify some information.  The caller seems to already have information about you so you feel comfortable sharing confidential information, such as your account number or birth date, to help the company correct the problems with your service.

Tips:  Be particularly suspicious of service calls you did not initiate.  If you are uncomfortable with a phone call that you did not initiate, ask for the purpose of the call and immediately end the call. Then, contact the company using legitimate sources such as contact phone numbers found on the company’s website or your account statements.

Report Bank Account Fraud & Scams

Help protect yourself and others by reporting any instances of attempted:

Bank Account Fraud

  • Seek the assistance of your Wells Fargo banker or call us at 1-800-869-3557.
  • File a complaint with the Federal Trade Commission (FTC) or 1-877-382-4357.

Scams

To learn more about these and other types of scams, please visit this FBI affiliate website.