Bank Fraud

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There are many different kinds of bank fraud. Check fraud is one example and it involves falsifying, duplicating, or forging checks. Kiting is another form of fraud that exploits banks' insufficient funds float to artificially inflate the balance of an account.. Falsification of a loan application can be considered bank fraud. With so many types out there, how can you avoid becoming a victim? There are many ways that criminals can commit bank fraud using your information so you need to ensure that you don't give them an easy way to do so. Here are some common mistakes to avoid so that you do not become a victim of bank fraud.

If someone you do not know sends you a check for any reason, be it an item they wish to purchase from you or a rental deposit, be wary of cashing this check, especially if it is for a large amount. Often what these fraudsters will do is ask you to cash a check, which is not for the proper amount, and then wire them the difference. When the check comes back to your account for any reason, you have lost the money you wired to them. Moreover, you are not likely to hear from them any time soon. Take care when using the Internet for transactions involving large amounts and never wire money to someone you do not know.

Internet-based banks and financial institutions have become very popular over the past few years. These banks offer higher interest rates and/or lower fees in many cases because they save money by not maintaining traditional brick and mortar locations. If you choose to use an Internet bank, make sure it is protected by some type of deposit insurance. If it is not, your money would be lost if they were to fail. It is best to go with a lower interest rate from a company that is protected by a state or federal deposit insurance such as the Federal Deposit Insurance Corporation.

One obvious, but commonly overlooked, way to avoid bank fraud is securing all of your confidential personal information. Fraudsters are constantly evolving to stay ahead of anti-fraud investigators and bank regulations. All it takes is for one unsavory character to get a hold of your bank statement, debit or credit card, tax returns, financial documents, and/or receipts. Investing in a good paper shredder is one way to secure your documents from falling into the wrong hands. With the rise in Internet or cyber crime, you must be even more careful when handling financial documents saved on or transferred from your home computer or laptop.

Bank fraud is a major problem and yet many people do not realize just how severe it can be. Bank robbers make off with an average of $700 and most are caught within a 24 hour period. When it comes to bank fraud though, the average loss is over $2,000 and the perpetrators may never be caught. Do not become a victim as it can take months if not years to clean up the damage which results. Take care with your confidential information at all times so that you do not become one of the millions of yearly victims of bank fraud.