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FDIC Consumer News
Special 10th Anniversary Edition - Fall 2003
Common Cons... and How to Avoid Them
By trickery, by stealing information from mailboxes or trash, or by using publicly available information, a crook obtains personal information about you for example, your Social Security number, date of birth and mother's maiden name. Doing so, the fraud artist may be able to obtain credit cards, take out loans, make counterfeit checks or cards and go on a spending spree in your name.
A criminal steals or finds a checkbook or collects enough information about a bank account to make a counterfeit check.
You receive an unsolicited and attractive offer for a product, service, business opportunity or similar deal, but you're told you must send money or divulge bank account numbers before you receive anything in return. Lo and behold, the promised goods or services never arrive or they come with significant flaws.
Credit/Debit/ATM Card Fraud:
With credit cards, a thief might use or counterfeit your card or obtain a new card in your name, perhaps by stealing a pre-approved card application from your mail and having the card sent to a different address. As for ATM cards and debit cards (which deduct for cash or payments transacted at teller machines or retail establishments), the perpetrator might steal an existing card, make a new one, or obtain your personal identification number (PIN) to authorize transactions.
Fraudulent Cashier's Checks:
Crooks know that consumers trust cashier's checks, money orders and other official checks so they are increasingly counterfeiting them for use in both long-distance (over the Internet) and face-to-face transactions. Some scams may involve a cashier's check for more than the amount due. You are instructed to wire the excess amount to the buyer's account. You comply... and later find out that the cashier's check is phony.
Automated Payment Fraud:
A crook posing as a legitimate business or charity gets the name of your bank and your checking account numbers, perhaps by tricking you into divulging the details over the phone or by sifting through your trash for old bank statements or checks. The thief then instructs your bank to debit (withdraw) a certain amount from your checking account.
One approach involves a fraudulent Web site touting extremely attractive deals in hopes that consumers will provide a credit card number, bank account number, password or a check. A variation involves a copycat Web site that deliberately uses a name or Internet address similar to, but not the same as, that of a large, well-known company. Yet another scheme uses an e-mail appearing to be from a company that you already do business with and that asks you to "re-enter" your Social Security number, credit card or debit card number, or PIN.
What can you do to fight these and other frauds?
Excerpted from "
Fighting Financial Fraud: How to Shield Yourself from Swindles
," Spring 2003.
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