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New Mobile App Scam Hits Consumers: Are You Aware?

By Seth Nadel, eCommerce Technology Analyst, Information Technologies

Mobile banking app scams are on the rise. We come across them every day, and are amazed how simple and effective they can be. Unfortunately, there’s another banking scam on the upswing too: the mobile check deposit scam.

You might envision a nefarious hacker sitting in a dark room, setting up a bogus WiFi network that tracks all your mobile keystrokes to obtain your username and password. That does happen, but the mobile check deposit scam isn’t quite so elaborate. In fact, it’s pretty simple. Here’s how it works. The scammer approaches a potential victim, either by email or social media, and promises to pay the victim hundreds or thousands of dollars if he accepts money on the scammer’s behalf through a savings or checking account. It sounds like an odd, even fishy, request, but when the scammers pose as potential employers, lenders or contest promoters offering free iPhones that need access to the victims account to deposit money, you can see why people fall for it.

The victim then gives an account number, PIN, address and phone number, using this to access the financial institutions mobile app to deposit fake checks into the account using the “check deposit” feature. Even though it takes a few days for the checks to clear, the money still shows up in the balance. Scammers then withdraw cash against it before the checks “bounce.” The scammers get all the money and the victim is now responsible for any overdrawn funds. Unknowing victim or not, your financial institution will hold you responsible for that overdrawn amount.

You may say, “I would never fall for that. I can smell that scam from a mile away!” Maybe. But these scammers are very slick, masters of social engineering, and they have swindled many people just like you. When it comes to your finances, be smart. That goes for who you bank with too. Choose an organization that can keep you informed, help you stay protected, and support you at all times.

Additional Resources:

Millennial’s Tech Habits Make Them the Worst Victims of Fraud

Pesky Subscriptions Could Be Costing You More Than You Think

Tips For Keeping Your Cash and Credit Safe During the Holiday Season

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