Types of bank frauds you need to know

The act of obtaining money or other assets held by a financial institution via dubious methods is referred to as all forms of banking fraud. More con artists are being linked to schemes as internet banking fraud increases. But how do these many forms of financial fraud vary from one another? Please read this article of SmartOSC to explore 6 types of bank frauds you need to know.

Skimming

Skimming is the illicit practice of copying the data from a credit card’s magnetic strip. This often occurs when a credit or debit card is lost or stolen since the fraudster may either use the card online by utilizing the card information or skim the data from the magnetic strip.

Scammers cannot withdraw cash without the card pin, but if contactless payments are enabled on the card, they may use the card to make contactless purchases. An RFID reader may also be used to scan contactless cards through luggage, which is more likely to occur in crowded settings like types of bank frauds and public transportation. 

Card not received

This happens when a bank sends a client a new or replacement card, but it gets stopped in transit. If the post is not properly protected upon delivery, it most often happens in shared dwellings (such as a block of flats or a house share).

The PIN number should be provided in a separate letter if the card is new, but this won’t prohibit a con artist from using the card for contactless or internet transactions. 

Card not received one of types of bank frauds might be more difficult to spot since the intended victim may not first realize the card is missing.

In-person (stealing card and PIN)

Financial fraud that is carried out in person, sometimes done by utilizing an ATM or other decoys to peer over someone’s shoulder, may be risky since it occasionally gives the con artist access to the target’s bank card and PIN.

In order to get additional identifying information about the target, the con artist may sometimes strike up a discussion with them. The card may be used in a variety of ways, similar to skimming, but with the PIN and types of bank frauds, choices are expanded to include in-person retail purchases.

CEO fraud

CEO fraud is one of types of bank frauds, often referred to as whale phishing or business email compromise (BEC), is a sort of financial fraud that happens when a con artist poses as a senior management or CEO to coerce an employee into making a payment.

The typical method of CEO fraud involves sending a fake email from a top employee to the company’s accounts team. A partner or supplier is asked for an urgent payment in the email.

Invoice fraud

This case of bank fraud targets companies by pretending to be a supplier and seeking to change the bank information where invoice payments are made, often by email. If the fraudster has obtained the supplier’s information via hacking, this might seem completely benign since the request will seem real.

In this specific instance of types of bank frauds, a Lithuanian hacker emailed false invoices to the tech titans while posing as an Asian manufacturer.

Online banking fraud

Phishing, virus assaults, catfish scams, and clone websites are just a few of the various ways that online banking fraud may appear. Given the prevalence of internet banking, it is not unexpected that this kind of bank fraud is widespread.

It is becoming harder for victims to defend themselves as scammers become better at crafting convincing emails and websites. Or, a con artist may send their victim an email asking them to “confirm” their PIN, account password, or other credentials after impersonating as bank employees.

Please browse our blog for additional details on this and other forms of types of bank frauds, such as investment fraud and money transfer scams. If you fear you are under investigation for fraud, have been implicated in fraud, or are suspected of committing any form of financial fraud, please get in touch with SmartOSC.