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Ways to Prevent Bank Fraud in 2021

Published: 31st May 2021 13:14



Bank fraud is one of the most insidious and stressful types of fraud perpetrated by scammers in 2012. Bank fraud includes several types of fraud. One type or many can occur simultaneously once a scammer amasses enough personal information about an individual. It is considered a criminal offense in many jurisdictions and territories across the globe but is generally considered a white-collar crime, unlike bank robbery and theft. Scammers use a person’s information to obtain money, assets, or even property through bank fraud schemes and can apply for loans on homes and cars, and initiate withdrawals from accounts if they possess bank account numbers. Many common types of bank fraud include the above-mentioned frauds, using personal identification gleaned from either fraudulent phone calls or online by a person’s identity.


However, there is a type of bank fraud that has been in use for many years and is difficult to stop. It is prevalent in 2021 because of the unemployment rate. Untold amounts of money are lost to individuals that fall prey to this scheme. It is called “kiting”, and involves fraudulent check-cashing schemes. Individuals who fall prey to this scheme usually are contacted either online or offline by the scammer, who promises a job that includes very simple work, such as the processing of paperwork, or data entry work. Forms are provided to individuals that ask for personal banking information in order to get paid. These forms are scarily realistic looking and real company information or logo may appear on them. But these are spoofed. These kiting schemes, in order to draw a person in more quickly, may just ask for name and address, and then mail a check, which looks real to the target of the fraud. An interview is conducted via online social media platforms to make this look more realistic. 


The check that is mailed will look real also. The target is then instructed to cash the check as their payment for needed equipment, etc., to do the job for which they believe they have been chosen. After the check is cashed, some of the money is requested to be sent back to the scammer via wire transfer. Since the check is not real, in a few days, it does bounce, but not before the money has been taken out of the target’s account, and already sent via wire transfer to the scammer. This delay in transfer between banks is called the “float” and it is what scammers rely on to achieve their ends. It is a time lag term that works for scammers. There is no method of recovery, however, for this money lost, and the scammers count on the delay in check verification since this can take a few days, especially since most of these checks will be issued from out-of-state areas.


Many banks, when presented with these types of out-of-state checks will advise their customers to wait a few days and will follow up with the issuing bank listed to see if the account is real. Not all banks do this, however, and a good rule of thumb for any target of kiting schemes, is never to try and cash a check from an unknown entity without first visiting the website of the listed company, or even searching their name, and then calling them. Companies do generally welcome the knowledge that their company information is being fraudulently used. These types of schemes should be reported to the local police or government entities as they are a serious type of bank fraud. 


Consumers, especially those that are searching for employment in work-from-home opportunities, are subject to more of these types of kiting schemes, and can even experience gift card schemes that use kiting. Work from home opportunity sites collect a lot of personal information on those that sign up and this has significantly increased the number of kiting bank fraud schemes over the years. Even simple babysitting or pet sitting sites can have a number of these scammers signed up as real employers, and the scammers are very convincing as they usually contact a job seeker using the name of the sites where a job seeker has registered. The scammer can first contact a target saying that they are a recruiter, noticed the target’s resume, and would like to conduct an interview and then hire them. The interview can ask for additional personal information. If the individual that is the target refuses to provide information or cash a check, then the scammer simply resells the information to other scammers, so it is a “win-win” for the scammers. 


Preventing bank fraud in 2021, especially those that involve kiting, since many individuals now are seeking work online via freelance and job seeker sites, involves sharing as little personal information as possible on these sites and online. Never post a resume to a freelance listing site for one, instead, make it known that information is available only upon request It is impossible not to provide some personal information on these sites as an individual will not be listed if they do not do this. However, posting the bare minimum helps prevent bank fraud schemes. Since scammers spoof these sites, any untoward behavior or request for personal information should be shared with the site where a target is listed ASAP, so that the scammer’s account can be deleted.


Knowing about all the intricacies and methods of what is bank fraud will assist in preventing it or at least diminishing the attempts at it. If any type of bank fraud is suspected all financial institutions and companies such as credit card, loan, and mortgage companies should be contacted and aware of the attempt at the fraudulent activity. The best defense is a good offense and all personal information that exists online should be located and scrubbed from listings if possible. Limiting what is shared online will cut back on scamming and bank fraud but cannot eliminate it entirely. But it is definitely a step in the right direction and following up and not “falling for” easy money schemes will prevent a lot of future heartaches.

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