How financial institutions can help accountholders avoid bank impersonation scams
Phone spoofing technology has made it easier for fraudsters to appear legitimate. An incoming call may display a familiar phone number, the caller may sound professional or the situation may seem urgent. That is what makes bank impersonation scams so effective.
As these scams continue to evolve, financial institutions have an opportunity to help accountholders recognize the warning signs before fraud occurs.
How do bank impersonation scams work?
A bank impersonation scam often begins with an unexpected phone call or text message claiming there is a problem with an account. The fraudster may report suspicious activity, a compromised card or another security concern requiring immediate attention.
To make the interaction appear legitimate, scammers frequently use caller ID spoofing technology to display a financial institution's phone number. The fraudster's goal is usually to gain access to account credentials (like usernames and passwords), obtain personal information or convince the accountholder to move money to an account controlled by the scammer.
What warning signs should accountholders watch for?
While scam tactics vary, most bank impersonation scams share several common red flags.
Unsolicited contact about an urgent issue
Fraudsters create a sense of urgency to pressure accountholders into acting quickly. They may claim an account has been compromised or that funds are at risk. Counter this by encouraging accountholders to pause and verify the situation before taking any action.
Requests to transfer money
One of the most common tactics is convincing an accountholder to move funds to a "safe" or "new" account to avoid fraud. Scammers may direct victims to send money through a wire transfer, peer-to-peer payments or cryptocurrency. Despite the explanation provided, the funds are being transferred directly to the criminal.
Requests for passwords or verification codes
Accountholders should never share passwords, PINs, account numbers, social security numbers or one-time passcodes with someone who contacts them unexpectedly.
This includes verification codes sent by text message. Fraudsters are increasingly seeking out these codes to bypass security controls and gain access to online banking and payment accounts. Once a code is shared, the scammer may be able to completely take over an account or authorize fraudulent activity.
To prevent this, remind your accountholders that a legitimate financial institution or payments provider will not ask an accountholder for remote access to a computer, phone or other device to resolve an account issue.
Requests to participate in a "sting operation"
Some fraudsters claim a local branch employee is involved in criminal activity and ask accountholders to help investigate by withdrawing funds, transferring money or misleading bank employees. No reputable financial institution would ask an accountholder to participate in this type of activity.
What should accountholders do if they receive a suspicious call or text?
One of the simplest and most effective ways to stop these scams is to end the conversation and contact the financial institution through a trusted phone number.
Our fraud operations teams routinely advise accountholders to call their local branch, or the number on the back of their debit card, whenever they suspect fraud. Taking that extra step removes the scammer from the conversation and allows the accountholder to verify whether the issue is legitimate before sharing information or taking action.
Education remains one of the strongest fraud defenses
Technology plays an important role in combating fraud, but education remains one of the most effective prevention tools available. Encouraging accountholders to slow down, disengage from suspicious communications and contact a trusted branch directly can help prevent financial loss and account compromise.
Financial institutions can reinforce these fraud preventing messages through websites, statements, email campaigns and social media. SHAZAM® offers fraud-related educational resources, including materials on spoofing scams and a social media toolkit that institutions can use to support ongoing accountholder awareness efforts.
As fraud tactics continue to become more sophisticated, consistent education helps ensure accountholders recognize the warning signs and know exactly what steps to take when something does not seem right.