A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

May 10, 2023

BANK FAILURE SCAMS

Attribution: scambusters.com

The threat of more bank failures after recent collapses has prompted crooks to get in on the act by sending bogus alerts to customers. They are after your money and personal identity.

One tactic used by the crooks is to impersonate officials from the Federal Deposit Insurance Corporation (FDIC) – the organization that effectively guarantees individual deposits of up to $250,000 and acts as the receiver, responsible for sorting out the aftermath of bank collapses.

The FDIC simply does not contact consumers and businesses to request this information. So, if you receive a message asking for personal information it’s a scam.

Many financial institutions have issued warnings to their customers. For example, online bank CapitalOne says: “Scammers are using this moment of change to take advantage of unsuspecting customers. By preying on common anxieties, fraudsters can trick you into sending money to a phony bank account or providing your personal banking information.”

The America’s cyber defense agency, the CISA, has issued a strong warning to businesses and consumers:

“Exercise caution in handling emails with bank-related subject lines, attachments, or links,” the agency said. “In addition, be wary of social media pleas, texts, or door-to-door solicitations relating to any failed bank.”

Fraudsters posing as the FDIC, or even banks themselves, might also ask for a payment to secure your bank deposits or, supposedly, to increase your protection beyond the standard $250,000. Their trick is easily exposed – they usually ask for payment in cybercurrency, money wires, or even gift cards.

Legitimate financial organizations don’t do this. If you bank with an FDIC-backed institution, which most banks do – plus the equivalent for credit unions – you don’t have to pay any type of premium to protect your savings.

Another trick, particularly targeting businesses, is to pose as a product or service supplier, saying they’ve switched their account to another bank for safety. They ask victims to send their money to this new account, which they would drain immediately.

Businesses and consumers should be wary of any type of contact that uses scare tactics to try to make you panic into following their instructions. Never act on this type of contact without independently verifying the supposed issue.

                                                                                             #