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Consumer fraud series: Fictitious or unauthorized banking

So far in our consumer fraud series we have learned about three different types of fraud: identity theft, phishing, and cashier’s check fraud. We know that there are numerous ways scammers can steal information and use it for fraudulent purposes, and we have identified some specific scenarios in which the theft could take place. This week, we are going to focus on a fourth type of fraud known as fictitious or unauthorized banking.

A fictitious or unauthorized bank is one which is not chartered or authorized. In other words, they are fake banks created by scammers to lead a consumer into believing they are working with a trustworthy financial institution in an online or mobile transaction. These types of scammers are known to actually hack into a legitimate banking system.

In recent attacks of this nature, scammers would wait for a bank customer to log in to their bank account online. Then, they would immediately change what the customer was viewing on the main page to a message advising of an upgraded security system that required a quick training session. That training would include requiring the customer to “practice” making a transfer to another account. The customer would be advised that no money would be transferred, nor would any account be debited. The consumer would then go through the process, only to find out at a later time that money had actually been transferred to a fictitious bank account. Usually, once the scam was recognized, the scammer would have already taken the money that was transferred and disappeared.

Banks have recently developed strategic security measures to prevent this type of fraud from taking place. If you believe you have been a victim of fictitious banking, an attorney can be of great assistance in reporting to the proper authorities and possibly locating the culprit.