Mobile banking is growing in popularity, with more than 160 million Americans using some form of digital banking as of 2019. In 2021, 89% of banking customers in the US use mobile banking for account management, and it is estimated that more than 3.6 billion people will use online or mobile banking by 2024.
Unfortunately, the convenience of online banking has created many opportunities for fraudulent transactions and deposit scams. Globally, banks lose more than $1 trillion to various types of cybercrime every year, and mobile deposit scams are one of the most widespread ways that online thieves are robbing consumers of their hard-earned funds.
Mobile deposit scams, or fake check scams, involve fraudsters depositing fake checks into victims’ bank accounts to gain access to their money. Once these deposits are made, victims are asked to withdraw the funds and return them, usually through a third-party money transfer account. When carrying out mobile deposit scams, cybercriminals typically make up intricate stories explaining why they cannot access the money themselves, which often makes their stories seem more legitimate.
As of 2019, 72% of mobile banking scams involved remote deposit captures and fake checks. According to the Federal Trade Commission's (FTC) Consumer Sentinel Network database, more than 27,000 fake check scams were reported in 2019, with losses reaching around $28 million. Mobile deposit scams often target the elderly and young adults, especially people in their twenties. Of these scams, 51% claim to be lucrative job or career opportunities, 18% are carried out using online selling scams, and 4% claim to be grants or rewards.
There are many different types of remote deposit scams, but two of the most popular are carried out through fraudulent job postings and fake payday lenders.
Victims of sweetheart scams accounted for $304 million in losses last year, an increase of 50 percent from 2019.
These dating app or romance scams are simple - cybercriminals create fake profiles on dating sites or apps such as Hinge, Tinder, or Craigslist. They start conversations with their targets, building trust and rapport over weeks or months. Once a “relationship” has been established, they claim to need money for a medical emergency, funeral expenses, or hospital bill.
These fraudsters will often ask victims to send them funds using wire transfers or set up a new bank account. The stolen money is then deposited into the new account prior to the wire transfer. These scammers often say they’re located out of the country and may immediately ask victims to move communication off the dating app to personal email or text messages.
Sweetheart scams can be devastating for several reasons. Not only can they deplete a victim’s life savings or hard-earned cash, they can also violate one’s trust through the simulation of a real romantic relationship.
With more jobs becoming remote in the past few years, work-from-home scams are on the rise. These scams often target people in their 20s and 30s, especially those looking for remote positions with flexible hours. These mobile deposit scams attract job seekers with advertisements for nondescript jobs that don’t exist, such as mystery shoppers or vague marketing positions. After a person applies, they’re asked to divulge their banking information so that they can receive an online deposit to cover job-related expenses. Once the scammer has the information they need, they leave their victims with a bank account in the negative.
Although it is easy to feel helpless against banking scams, there are many ways to protect yourself. Here are some tips that will help keep your financial data safe:
Avoiding financial scams and protecting your checking or savings accounts may seem like daunting tasks, but remaining vigilant and learning how to spot mobile deposit scams can keep you safe. Learn more about how opening a checking or savings accounts with Texas Tech Credit Union will keep your financial and personal information secure.