What is Payments Fraud?
Payments Fraud occurs when an individual
uses one of several payment devices (e.g., checks, credit
cards, etc.) to conduct fraud and steal your money. The most
common types of payments fraud include:
-
Check Fraud
-
Wire Fraud
-
ACH Fraud
-
Card Fraud
There are several different types of
check fraud that consumers need to be aware of. They
include:
-
Counterfeit checks - Checks are reproduced, utilizing information from
legitimate accounts, usually by means of high quality
copiers, scanners or desktop publishing software.
Counterfeit checks have varying degrees of quality, with
some instances being almost identical replicas to the
original check, including the check stock itself.
-
Altered checks - Checks that have been altered in some way with chemicals
or other means so that the valid information can be
erased and the checks can be re-written.
-
Forged signatures - Typically blank checks that have been obtained by the
fraudster and then signed with a false signature or
valid checks that have been endorsed and cashed by
someone other than the payee.
Prevention Tips - Check Fraud:
- Keep your checks,
deposit slips and bank statements in a
secure location.
-
Review your
statements closely and report any
discrepancies to your bank immediately.
-
Do not share
your account number with anyone who does
not need it.
-
Destroy old
checks, statements, ATM receipts, etc.,
before discarding.
-
If you pay
bills using checks that will be put in
the mail, put them in a U.S. Postal
Service blue box or bring them to the
Post Office.
-
Never sign a
blank check.
-
Do not endorse
a check until you are ready to cash or
deposit it.
-
Do not put
your Social Security number, driver's
license number, telephone number, or
credit card number on your checks.
-
Use a Uniball
207 gel pen (available at office supply
stores, discount department stores, and
some grocery stores) to write checks.
The gel gets trapped in the paper and
makes it much harder to wash than
regular ink.
Both wire and ACH
(automated clearing house) transactions are
forms of electronic fund transfers (EFTs).
The primary difference is that wire
transfers are done in real-time and ACH
transfers are not. Wire transfers typically
involve larger sums of money, are
transferring money from one bank to another
bank, and are more expensive to do. ACH
transfers typically involve smaller amounts
of money, take longer to process, and are
less expensive to do. Payroll deposits and
online bill payments are examples of ACH
transactions.
Wire and/or ACH fraud occur when a fraudster
uses one of these transfer methods to obtain
money based on false representation or
promises. For example, you may purchase an
item on an online auction site, wire the
money to the seller and either never get the
item or receive an item of a lower value
than was advertised/promised. Another common
type of wire/ACH fraud involves what appears
to be an email from a friend stranded in a
foreign country after being robbed. This
"friend" asks you to wire them money so they
can get home. Phishing and malware are often
used to obtain your bank logon credentials.
Once the fraudster has these, he/she can use
them to wire money out of your account and
into his/hers or use your money to initiate
payments for his/her own bills.
Prevention Tips
- Wire/ACH Fraud:
-
Monitor your accounts
regularly for
unauthorized
transactions. Report any
unauthorized
transactions to your
bank immediately.
-
Do
not share your online
banking logon
credentials (user ID and
password) with anyone.
-
Do
not share your account
number with anyone who
does not need it.
-
Never
access your bank account
using a public computer
(e.g., at the library or
a hotel business
office).
-
Install a firewall on
your computer to prevent
unauthorized access.
-
Install and run
anti-virus and
anti-spyware software on
your computer and keep
them up-to-date.
Card fraud
is theft and
fraud
committed
using a
credit or
debit card.
The
fraudster
may use the
card to
obtain
products or
services or
to withdraw
money from
your
account.
Credit and
debit card
information
is most
often
obtained
through
phishing
(all forms)
and
skimming.
You may
click on a
link in an
email that
downloads
malware onto
your
computer.
The malware
will then
enable the
fraudster to
steal your
logon
credentials
the next
time you log
into online
banking.
Prevention Tips - Card Fraud:
- Sign the back of your card as soon as you get it.
- Get online statements instead of paper statements that come in the mail.
- Check your statements as soon as you get them.
- Be sure any sites you put your card information into (e.g., online shopping sites) are secure. The URL should start with https, not http.
- Protect your cards like you would cash - try not to let them out of your sight.
- If your card is lost or stolen, notify your bank immediately.
- Shred credit card applications you may receive in the mail.
- Keep a record of account numbers, expiration dates, phone numbers and addresses for each credit card in a secure place.
- Never give your credit card number over the phone unless you initiated the call and are dealing with a trusted source.
- Do not store your PIN with your credit/debit card.
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