The fraudsters out there have turned to a new type of scam, and your financial institutions want you to be vigilant.
The criminals are trying to convince you they’re from the fraud department at your financial institution, in hopes you’ll give them access to your account so they can then drain it. Banks and other institutions have invested in security over recent years to protect their customers from criminals trying to breach the systems and commit such crimes as taking over consumers’ accounts.
“The criminals know this, so they’re not coming directly to the banks. They’re going directly to the consumers and trying to convince the consumers to provide them with access so they can get into the account,” said Stacey Nash, senior vice president of bank fraud and operations for USAA, a financial services company for military members, veterans and their families.
“My goal is that every USAA member and every consumer knows that a bank would never ask you for a password, a PIN or a one-time code,” she said.
According to the Federal Trade Commission, more than 2.8 million consumers reported fraud in 2021, and imposter scams were the most commonly reported fraud category. Military consumers filed more than 110,000 fraud complaints, including 44,039 imposter scams. Of those imposter scams reported from the military community, 20% reported a loss, for a total of nearly $104 million; with a median loss of $1,031. Those numbers include reports from active duty troops and their spouses, Guard and reserve members, retirees and veterans.
Imposter scams are a subset of fraud reports. They include such things as romance scams, people falsely claiming to be the government, a relative in distress, a well-known business or a technical support expert in order to get a consumer’s money.
Another 7,782 military consumers reported bank fraud in 2021.
Here’s how this latest scam is working, according to Nash:
A text that reads “bank alert” pops up, purportedly from your financial institution, asking whether you authorized a specified transaction for a specified amount, on a specified date, at a specified merchant.
Of course, you didn’t and you respond “No.” The next message that pops up informs you that they’ll be contacting you shortly. Your phone rings, and a voice on the other end claims to be your bank’s fraud department — but it’s not. It’s a criminal.
“They’re basically saying, ‘I’m calling in order to help you. I’m going to need login credentials, password, phone code’ — all those things that a bank would never ask for,” Nash said. And they may spoof the financial institution’s phone number, so that it shows up as your financial institution’s number. That’s another effort by the criminals to get you to trust them.
If a legitimate financial institution is contacting you about possible fraud, the call will involve walking you through information they already have about multiple transactions to verify what’s legitimate and what’s not. The scam “is nothing like that. They immediately — before they help the member — ask for the login credentials, the password, PIN or one-time verification code that [legitimate financial institutions] would never ask for. …
“It’s despicable. Consumers in general are falling for it, because they think the call is coming from a place they trust that is trying to protect them.”
If you think you’ve fallen victim to this scam, call your financial institution immediately. “As soon as they call us we can change their password, we can change their information, so that whatever this fraudster has is now useless,” Nash said.
“If anything has been moved from the account time has to be on our side, because if there is something that has been changed or moved from the account, we have the opportunity to reverse it and retrieve it,” she said.
Like other financial institutions, USAA has constant fraud monitoring so, even in situations where someone falls victim to this, if account activity is out of character for an individual, they’ll alert the member and sometimes will freeze the account to protect the member, she said.
Having these robust fraud detection systems in place is critical for all financial institutions.
“Just last week, an 88-year-old woman nearly fell victim to an imposter scam via multiple wire transfer requests,” said USSA spokesman Bradley Russell. “USAA systems were able to detect this and contacted her to make her aware. While not foolproof, it’s evidence of our systems’ ability to detect — and prevent — fraud in some cases.”
USAA has an account takeover care team that provides members with the tools, resources and a single point of contact to guide them through the process of restoring everything to the account, Nash said. They can also provide advice to members who may have had accounts outside USAA that have been affected. “We want to make sure that if the fraudster has impacted anything else, that we’re talking the member through that, too,” she said.
There have been reports about customers of other financial institutions who have been victimized. Wells Fargo posted a warning to customers not to send money to themselves, such as through a mobile payment system, when a supposed bank employee tells them to “reverse the transfer” on the pretext there was a fraud. Legitimate financial institutions don’t tell customers to do this.
While declining to discuss this particular type of scam, Navy Federal Credit Union officials said they see a wide variety of fraudulent activity targeted at their members.
“We regularly work to educate our members about fraud prevention,” and members can discuss questions or concerns by phone, available 24 hours a day, or at their local branch, said Tonya Washington, Navy Federal’s vice president of security systems, projects and training. Its clientele includes active duty members of all branches, as well as retirees, veterans, family members and others.
USAA didn’t provide information about the number of cases of this fraud they have seen or the number of complaints from members who actually stopped the fraudsters before they were able to complete the transaction.
However, Nash said, “Our members have been amazing. We have had so many members call and say, ‘Hey, I want to make you aware of this. This just happened to me.’ "
They ask members to send any information — such as the phone number and any other details they get from the fraudster — to firstname.lastname@example.org. “We can add that to the various cases that we have because we are working with law enforcement … to make sure that wherever possible we can bring these criminals to justice,” Nash said.
She declined to say whether any of those criminals have been prosecuted, but said USAA is actively working with other financial institutions.
“This is one of those things that, from an industry perspective, we’re very focused on collectively — protecting American consumers,” Nash said. “I do think that the stronger we are and the more times [criminals] try this and aren’t successful, they’ll stop trying.”
She also has a message for all consumers: Tell everyone you know, including neighbors, elderly people, friends and family about this scam.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.