A Guide To Digital Bank Scams By Money 2.0 Conference

A revolution in the financial scam is being brought about by the transition of banking to digital channels. This was once the domain of small-time thieves aiming to steal relatively tiny sums of money. However, today’s digital banking scam is a significant international industry where highly skilled criminal gangs use cutting-edge tools and regularly work with dishonest bank employees to steal enormous quantities of money. As a result, the obligations banks must take on to pay their customers’ losses due to scams have increased.

The experts at the Money 2.0 Conference, a global finance event in 2022, discussed how the number of digital platforms has grown and the paths that scammers might take with it. And with the introduction of Open Banking and the entry into force of Europe’s second Payment Services Directive, their options are likely to grow. This will offer a new set of difficulties for banks, who will continue to be responsible for losses brought on by unlawful transactions made through these new digital channels.

This blog will discuss the what, why, and how of digital banking scams in light of this alarming context. The Money 2.0 Conferenceteam intends to share knowledge in order to assist banks in identifying their vulnerabilities, anticipating impending threats to digital banking scams, and learning the most current best practices so they cannot only identify such fraud but also prevent it.

Types Of Digital Bank Scams

  • Overpayment scams

If you sell goods or give services online, you may become a victim of an overpayment scam. Scams involving overpayments can start with someone sending you a fake cheque or money order for more than what is owed. They then want you to wire the difference back to you after depositing the funds in the bank.

Sadly, because the check was a forgery, you might be responsible for paying the bank’s returned cheque charge. In addition, you forfeit any money you transmitted and, if you shipped goods, the item itself.

  • Scams using cheque-cashing

The cheque-cashing scam is another cheque-related scam. This con takes advantage of other people’s kindness and goodwill. You are approached by someone outside a bank or another financial institution who asks you to cash their cheque. They can say they need the money but don’t have an account at this specific bank.

You can deposit the cheque and withdraw cash from your account to give the person their money. The clearing procedure, however, may take many days. Therefore, the money is held against your account if the cheque doesn’t clear.

  • Fraudulent unsolicited cheques

Have you ever had an unexpected cheque arrive in the mail? It can resemble a rebate cheque or an overpayment refund. Check the cheque carefully, and read any small text on the front or back. By signing the cheque and cashing it, there’s a risk that you’re creating an enforceable contract. Scammers employ techniques like these to persuade you to approve memberships, loans, and lengthy agreements that could cost you a lot of money.

Scammers are banking on you to naively cash the cheque after taking it as free money. Never cash a rebate or return a cheque that you didn’t request.

  • Fraudulent automatic withdrawals

Withdrawals made automatically are an excellent way to automate saving, paying bills, and other tasks. But for different reasons, scammers also enjoy automatic withdrawals.

This scam operates because victims get a call or postcard telling them they’ve won something or are eligible for a special deal. The objective is to read off the numbers on the bottom of your cheque. They frequently present this to ensure you are eligible for the offer.

Your cheque and bank account information is put on a demand draught, which is processed similarly to a cheque but doesn’t call for a signature after the scammer gets it. Your bank will send funds from your cheque account to the con artist once they receive the draught. You could not become aware of the scam until much later if you don’t pay great attention to your regular bank activities.

  • Ponzi schemes

This kind of online scam involves the sending of a text message or email that appears to be from your bank. A common request in the notification is for you to confirm your details to prevent the account from being closed.

The message may even contain a link that leads to the bank, but the link directs users to a phony website that has been made to resemble the bank’s website. The con artists log the information you enter for your account.

The email may occasionally instruct you to phone a phony customer support number. If you do, someone will try to convince you to divulge private information, such as your date of birth or Social Security number (SSN).

Sometimes, scammers already have some of your data. They might provide private information like your birthdate or the last four digits of your SSN to win your trust. They might have obtained it through a data breach or from your social media activity.

  • Stolen credentials

Another famous technique hackers use to access bank accounts, or financial transactions is to steal, crack, or guess passwords. According to studies, the more skilled and technologically sophisticated hackers can attempt one billion guesses in a second.

Using stronger passwords is the most robust defense bank clients have against these assaults. Longer passwords, particularly those made of letters and digits, are typically more challenging to decipher.

A password with five characters can be broken in ten seconds, but one with eight can take 115 days to guess correctly. Additionally, experts at the Money 2.0 Conference emphasized that if you find it difficult to remember your passwords, write them down in a safe document rather than on your office desk where everyone who walks by can see them.

  • Government impersonation scam

Pretending to be a government representative is another frequent bank scam. You get a call from the scammer claiming you’ve won something, but you need to pay taxes or other fees so they can process it. If you don’t pay what they claim to be an unpaid debt, they may threaten to put you in jail. The truth is that no government agency will ever call you and request payment of any kind.

Scammers may use names of legitimate federal institutions, such as the Federal Trade Commission, or make up their own, such as the National Sweepstakes Bureau (FTC). In either case, it’s a scam since this isn’t a method that federal agencies employ to collect money.

How To Avoid Scams With Online Banking

As long as people keep falling for scams, they will probably continue to exist. You may safeguard yourself and your bank account by heeding the advice provided below by the professionals at the Money 2.0 Conference.

  • Make sure your passwords are secure and update them periodically.

Most people have used the same password on several different websites once or twice. However, this is one of the simplest methods that hackers have discovered to access your accounts. If they figure out one of your passwords, they could be able to get to your other money.

Make unique passwords for each website. They must be 12 characters long, contain symbols, lowercase, uppercase, and numeric characters.

  • Always use the bank’s official website or mobile application.

To check your account, don’t open any links in messages or emails; instead, go to your bank’s website. Similarly, if you get a call, call your bank immediately at the provided number.

Use two-factor authentication when logging onto the websites of your financial institutions. Each time you log into your account, a one-time code will be issued to you through text or email.

  • Use caution when using free WiFi to access your bank.

Anyone who logs onto public WiFi can see what you do online. Because of this, you should only access your bank account via a virtual private network when using public WiFi (VPN).

  • Regularly review your bank statements.

Every month, thoroughly review your bank statements to be sure there have been no fraudulent transactions. If you notice any payments or withdrawals you don’t recognize, get in touch with your bank immediately.


Manage who has access to it proactively to avoid hacking your bank account or other personal information. Despite being particular to banks, the potential scams are only a tiny portion of the identity theft industry. Scammers are ready to take advantage of any opportunities to disclose any weaknesses associated with your banking because your bank accounts are how you access and interact with many parts of your financial life.

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