If you receive a call from your bank’s fraud department, hang up. In fact, better yet, don’t answer the phone at all. That’s the advice from a Reddit thread this week about a banking scam.
The Redditor “Keyann” wrote a post that said he or she received a call from someone claiming to be the fraud department of his or her bank, saying there was a fraudulent airline charge.Here’s the twist: The caller ID for the call even said the name of the bank. But when the caller asked for the Redditor’s PIN number, Keyann smelled a rat. “The caller ID makes it seem real,” Keyann wrote. “The actual fraud department said they have seen this multiple times with the caller ID showing as the bank.”
This type of scam is fairly widespread, said Seth Ruden, a principal who manages fraud at ACI Worldwide, a Naples, Fla.-based payments company. The trick is to find something that is easy to fake, but most people believe is a sign of authenticity. He calls this “social engineering,” and says these tricks that make the scammer seem legitimate and like he or she is working for a financial institution may be the greatest risk in keeping money safe right now.
“When the fraudsters are so sophisticated to where they can spoof phone numbers, it puts everyone at a disadvantage,” he said.
These types of scams can be expensive.
In 2016, about 6% of consumers were victims of fraud, according to a survey of more than 5,000 consumers by the advisory firm Javelin Strategy & Research. When those scams involved taking over a financial account, it cost victims an average of $263, not to mention the time it takes to resolve the issues, Javelin found.
Of course, if consumers are ever contacted by someone claiming to be from a trusted financial institution, they should never hand over identifying information such as a credit card’s expiration date or security code, said Adam Levin, the chairman and co-founder of Credit.com and the author of “Swiped.” But that doesn’t always happen when people are taken off guard and, in that moment, believe the person is trying to help.
In some cases, fraudsters will even ask for a social security number as proof of identity, he said, and duped consumers have handed them over. This type of scam is particularly directed at senior citizens, who may be fearful their cards have legitimately been compromised and offer up confidential information, he said. “First they gave their credit card information, then they give them their life,” he said, since fraudsters can use that social security number to wreak even more havoc, including potentially opening financial accounts, getting medical treatment through the hacked person’s insurance and filing for a fraudulent tax refund.
A better approach when someone claiming to be from a financial institution calls: Say you need to call back, he said. Then, look up your financial institution’s phone number separately by looking at the bank of your credit card or an account statement and call back.
Other riffs on the same scam include callers claiming to be from a jury commission calling to confirm eligible jurors in a county or claiming to be from the Internal Revenue Service or U.S. Immigration and Customs Enforcement.
Consumers should also regularly check their bank accounts for fraud, so if a scammer calls or texts claiming that a card has been compromised, the consumer can confirm that in real time on their bank’s mobile app or website, Ruden said. As fraudsters become more sophisticated at their confidence tricks, “diligence is even a higher requirement,” he said.
View more information: https://www.marketwatch.com/story/why-you-shouldnt-answer-the-phone-when-your-bank-calls-2017-03-30