Bank customers face two sophisticated and growing scams


Wouldn’t you love to be able to 'pay yourself?' A scammer is glad to help.

You'd better be checking your bank account daily – if not hourly! A new PYMNTS Intelligence and Hawk AI study says that the rise in digital payments has caused 43% of banks across the country to suffer fraud and in ways they never have before. 

Each financial institution lost nearly half a million dollars on average related to scams alone this year, but it’s not just the losses that are bringing the heat. The sophistication of these scams is forcing banks to increase investments and deploy modern-day machine learning and artificial intelligence (AI) to counter growing fraud. 

The scams leading the way are bank support impersonation scams. Those snow jobs are laying waste to banks just like they are with other industries.

But there are two other finance- and bank-related swindles that are starting to rise in the terror ranks, too: “Pay Yourself” and “Check Washing.”

'Pay Yourself'

The “Pay Yourself” scam is ruffling lots of feathers, most notably with Zelle customers. Zelle says the scam begins with a text message from a scammer that looks like a fraud alert from your bank – a trick that bank impersonators also play.

If you respond to the text message and engage the scammer, step two is a call from a number that appears to be your bank. On the other end is the scammer pretending to be a bank employee who offers to stop the alleged fraud. In reality, the scammer is actually tricking you into sending money to their bank account.

Scammers begin looking for consumers through phone calls, emails, text messages, or even social media messages. They often use spoofed phone numbers or email addresses that appear legitimate, making it seem like they are indeed from a trusted bank. Again, pretty standard scam tactics.

Where the scammer dons their “Pay Yourself” mask is this, says Zelle: “When you enroll with Zelle, your bank sends you a security code to verify your identity. The scammer claims that they need this passcode to authorize your payment to yourself,” the company says.

If you provide the code, then you’re simply handing them the keys to your account. With that passcode, they’ll be able to connect their bank account with Zelle utilizing your email or phone number. “Now the money you thought you were sending to yourself is sent directly to their bank account,” Zelle officials say.

'Check Washing'

According to the United States Postal Inspection Service (USPIS), "check washing" is growing at an alarming rate thanks to bands of thieves who fish personal checks from USPS mailboxes or take them out of your personal mailbox. They may even go as far as robbing mail carriers in search of checks. 

When they get away with it, they're probably lining their pockets pretty well. USPIS says it recovered more than $1 billion in counterfeit checks and money orders in the last year.

Sarah Grano, an ABA American Banking Association (ABA) spokesperson, gave ConsumerAffairs a quick overview of what happens once a thief has stolen your check. 

“Once they have a check you wrote and mailed -- for example, to a charity -- they use chemicals to ‘wash’ the check in order to change the amount or make themselves the payee,” she said.

“They then deposit your check and steal money from your account. If you have mailed a check that was paid, but the recipient never received it, you may be a check-washing victim.”

USPIS says this scam is double trouble for consumers because the losses are often financial and personal, like this gut punch: “Honey, did you get the birthday check that Auntie sent you”?

Grano told ConsumerAffairs that the ABA is working collaboratively with its members and other stakeholders to implement innovative solutions that target the real problem -- the bad actors preying on customers and the banks that serve them. Until that day arrives, though, she said consumers have to do some due diligence of their own, including:

  • Consider making payments using e-check, ACH automatic payments and other electronic and/or mobile payments.

  • Use pens with indelible black ink so it is more difficult to wash your checks.

  • Follow up with charities and other businesses to make sure they received your check.

  • Use online banking to review copies of your checks to ensure they were not altered.

  • If you still receive paid checks back from the bank, shred – don’t just trash them.

  • Regularly review your bank activity and statements for errors.

  • Don’t leave blank spaces in the payee or amount lines of checks you write. 

The United States Postal Inspection Services also recommends that you:

  • Drop off mail in blue collection boxes before the last scheduled pick-up time or directly at your local Post Office.

  • Regularly check your mail. Do not leave your mail in your mailbox overnight.

  • If you’re heading out of town, have the Post Office hold your mail or ask a trusted friend or neighbor to pick up your mail.

And if you become a victim? Grano says to immediately contact the United States Postal Inspection Service and file a report (or call 1-877-876-2455); contact your local police department; contact your financial institution.

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