Vigilance Prevents Deposit Fraud…But, Is That Enough?
- Wanna-be "influencers" targeted
- Scammers are often tripped up by the language gap
- Detecting patterns stops fraud
The Action 10 News Troubleshooter Series took a look at a popular scam that "fishes" for potential influencers by offering to pay them in return for allowing a "decal wrap" advertising a popular energy drink on their automobile.
In May, Deanna Reed responded to a Google pop-up ad on her phone. Someone claiming to be Rock Star Energy Drink asked if they could put one of their advertising wraps on her vehicle for 16 weeks in return for some money.
Why not? In mid-July Reed received a check for $5000. Then, another check for the same amount arrived almost two weeks later. The enclosed letter asked her to deposit the checks and wait for them to clear.
Awareness Prevents Loss
Luckily, Ms. Reed was suspicious -- most likely from hearing about other scams and stories from victims. She was also able to identify a key attribute within the fraud scheme:
"I called the bank that the check was drawn on," Reed said. "And he told me it was a scam. Not to deposit the check."
You know what else tipped Reed off about a possible scam? The way the letter was written.
"Deposit the check into your account and wait for it to clear, ok."
After the wrap had been put on her vehicle, the letter went on to say that Reed would get $500 a week for 16 weeks. The letter also said for more details, you need to text 940-202-1574. Text only.
The scam plays upon federal banking rules that require the bank must make the funds available right away when someone deposits a check into an account – within a day or two. Even when a check is credited to an account, it does not mean the check is good or "cleared." A week or so later, if the check bounces, the bank will want the money back and the consumer, not the fraudsters, will be liable for the withdrawn funds. The FTC has, in fact, issued warnings and guidance on this specific "car wrap" scheme.
Small Check; Large Potential Damage
Another scam in North Carolina -- flagged by local authorities -- involved letters sent to persons with a "reimbursement check" included for $10. It comes from “Book Marketing Services” and declares that the person overpaid on an item recently ordered. Local police warn that depositing the check can allow access to your account.
Of course, when a check is deposited the payor of the check is able to access the scanned images of the check which may contain pertinent information about your account and/or routing number. According to consumerboomer.com, a fraudster can do a lot with this information, including:
- Send Your Money Using Your Bank Account And Routing Number
- Commit ACH Fraud Using Your Bank Account And Routing Number
- Create Fraudulent Checks Using Your Bank Account And Routing Number
In the two instances above, both avoided becoming just another victim through awareness. But there are many more potential victims, and banking and financial institutions must continue their investments in fraud detection capabilities that include image-analysis with forensic AI technologies to identify counterfeits, forgeries, and altered checks. Combining these technologies with additional validations and payee name verification create effection protection from deposit fraud.