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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

These days, it’s all too easy to get sucked into a bank scam. The reason is that scammers, and their scams, are getting increasingly sophisticated. According to the latest Federal Trade Commission data, consumers lost more than $10 billion to fraud in 2023, a 14% increase over reported losses in 2022. The most commonly reported scam category in 2023 was imposter scams, which saw significant increases in reports of both business and government impersonators.

Scammers often use savvy tactics to commit fraud that make it hard to cancel or reverse the transaction. As a result, one of the best ways to protect your hard-earned cash is to be aware of what’s out there. Learn what the most common bank account scams are and how to spot them.

1. Overpayment Scams

If you sell products online, you could inadvertently be hoodwinked by this popular scam. Here, the fraudster will pose as a buyer and send you a check or money order for more than the purchase price. Then, they’ll ask you to refund the difference either through an online payment or wire transfer. But the original payment type was fraudulent, meaning you lose the refunded money. If you already sent the item you “sold” them, you’ll lose that too. But it doesn’t end there: You’ll likely also be on the hook for a returned item fee from the bank.

How to Avoid Them

If you ever receive an overpayment, your best bet is to ask the buyer to void it and send the correct amount.

2. Check Cashing Scams

This scheme appeals to your compassion. A scammer approaches you outside your bank to see if you would be willing to cash a check for them. They explain that they don’t have any ID on them or don’t have a checking account at that particular bank and really need the money. You deposit the check and, since it generally takes time for a check to clear, you give them the amount it’s written for from your own funds. Days or weeks later, the bank comes back to you and says the check is fake, and you’re responsible for the withdrawn amount, plus any fees.

How to Avoid Them

You’re better off saying no to anyone who asks you to cash a check for them, no matter what reason they give. You never know, and it’s not a good idea to risk it.

Recommended: Avoiding Mobile Deposit Scams, Fakes, and Hacks

3. Unsolicited Check Fraud

This banking scam involves a check you get in the mail. It might be described as a “rebate check,” a refund on an overpayment, or prize money for a contest you’ve won, even though you don’t remember entering one. You deposit it into the bank — why not?

Here’s why: There may be some (very) fine print on the front or back of the check stating that by cashing the check you are entering into a legally binding contract — one you likely don’t want to enter. It might be a membership with monthly fees, a loan, or other long-term commitment that ends up costing you far more than the “free” check you deposited.

How to Avoid Them

Be sure to double check any unsolicited checks with your bank before cashing or depositing them.

4. Automatic Withdrawal Scams

Also known as automatic debit scams, these involve unauthorized withdrawals from your bank account — typically checking accounts. Scammers get access to your bank account numbers through fraudulent telemarketer calls or by stealing them from unsecured websites when you sign up for a free trial.

Once a scammer has access to your account information, they set up an automatic withdrawal. When your bank receives the draft, they transfer money from your checking account to pay the scammer. Unless you pay close attention to your daily bank transactions, you may not notice the scam until much later.

How to Avoid Them

It’s a good policy to never share sensitive information over the phone, unless it’s with a trusted friend or family member.

Also make sure you only use encrypted websites when entering your bank information: Look for “https://” before the URL (not “https://”) and a locked padlock in the left corner of the address bar.

5. Phishing Scams

Phishing scams are particularly tricky because they come dressed as emails or texts from trusted companies you already know. The message may even mention suspicious activity on a personal account, such as your savings or checking account.

Typically, you need to click on a link in the email or text, and then complete an action like confirming personal information. When you click through, it usually looks like the website from your bank or the company in question. So you tap in the required information (which may be a password, account numbers, or some other type of personal information). The scammers now have your sensitive data.

How to Avoid Them

If you get an email or text warning you of suspicious activity or a compromised account, and asks you to click on a link, don’t. Instead, head to the website for the financial institution or company, and log into your account there. If there aren’t any notices asking you to update your information, chances are it’s a phishing scam.

6. Government Imposter Scams

A fraudster will contact you by phone, email, or text posing as a representative from a government or law enforcement agency (like the IRS, Medicare, or the FBI). They may ask you to provide personal information needed to issue a payment (like for a tax refund) or tell you that you owe money and need to make a payment immediately. The imposter could even threaten to put you in jail if you don’t reveal your personal information or send payment.

How to Avoid Them

Don’t engage with anyone who makes this type of contact. The reality is that a federal agency will never call, email, or text you and ask for personal information or a payment of any kind. This is not a strategy the government uses to collect payments or to get missing information on tax returns or other forms.

7. Charity Scams

Sadly, many scammers play on people’s compassion, kindness, and generosity to line their own pockets. A charity scammer might contact you by phone, email, or ringing your doorbell. They claim to represent a real (or real-sounding organization) and tell you in detail about an urgent need or crisis. They often flash legit-looking IDs.

You want to help, so you give them cash, a check, or, perhaps, your credit card or bank account information for a recurring donation. Unfortunately, they aren’t connected to any type of nonprofit organization and you’ve given funds or sensitive financial information to a scammer.

How to Avoid Them

If you’re approached by a charitable organization asking for money, don’t give right away — even if you fully believe in the cause. Instead, look up the charity to see whether it’s legitimate. There are online databases, such as Charity Watch, that will let you know if the organization is real, as well as exactly how the group will use your donation. If you’re still interested in giving to that charity, you can then reach out to them yourself and make a donation.

8. Employment Scams

A job scammer posts an enticing ad on a job board. The job they’re offering sounds too tempting to pass up. It might be a work-from-home set-up, the chance to be a mystery shopper, or a job that pays a full-time salary for part-time work. Before the employer can onboard you, however, you’ll need to pay a fee or supply your bank account information and other personal details so they can pay you. It’s all a front to get you to part with your money.

How to Avoid Them

Use only reputable job boards when job hunting and verify the position directly before sending any personal information. If a job offer sounds suspicious, research the company, check online reviews, and find out if there have been any complaints on the Better Business Bureau’s site before applying.

Also know that applying for a job should never involve paying a fee, even one supposedly needed to process your application or conduct background screening. If you encounter this scenario, the job is unfortunately too good to be true.

Recommended: Different Types of Bank Account Fraud to Look Out For

More Tips on How to Protect Yourself From Bank Fraud

To make sure you don’t inadvertently fall for a bank scam, here are some general guidelines to keep in mind.

Know the Red Flags

While today’s scammers are increasingly sophisticated, there are some red flags that can give them away:

•   You need to act urgently.

•   You’re threatened with law enforcement or a government agency action.

•   You’re told to purchase gift cards and provide codes as a form of payment.

•   You need to mobile deposit a check and then transfer cash from your account to the person or company that wrote the check.

Don’t Trust Strangers

Never cash a check for someone you don’t know, no matter what reasons they give you. Also refrain from engaging with unknown callers on the phone, even if they have government agency names as their caller ID.

Contact Your Bank

If you receive any calls, emails, or texts from your financial institution asking for information, don’t respond directly. Instead, reach out to your bank on your own using the phone number listed on your statement or debit card. You only want to provide information when you have initiated the conversation using a vetted contact number.

Stay Up to Date With Your Bank Statement

It’s important to carefully check your monthly bank statements, whether you view them online or receive them by mail. This will allow you to spot any suspicious activity right away. The sooner you catch and report a scam, generally the easier it is to resolve the situation.

The Takeaway

These days, scammers can come off as entirely believable — they can fake the caller ID and may already have a lot of your data so they sound like they’re legitimate. Fortunately, by knowing the red flags and all the latest scams for stealing your hard-earned cash, you can protect yourself and your bank account.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

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FAQ

How do bank scams work?

Bank scams usually involve someone asking for your banking or personal info — like account numbers, passwords, PIN codes — for a seemingly legit reason. They may have a “real” caller ID or a website that looks exactly like your bank’s. Once you provide or input your information, however, they use it to drain your account.

What bank information does a scammer need?

Having your bank account number and routing number is often enough for a scammer to perform fraudulent activities. While it’s not sufficient to access your bank account, it can allow a scammer to make fraudulent payments, create checks for your account, and make online purchases from retailers that only require bank account information.

What do you do if you suspect an online bank scam?

If you believe a scammer made an unauthorized transfer from your bank account, contact your bank as soon as possible. Let them know it was an unauthorized debit or withdrawal and request that they reverse the transaction and give you your money back.

If you gave a scammer your username and password, you’ll want to create a new, strong password. If you use the same password anywhere else, change it there, too.

If you gave a scammer your Social Security number, you can go to IdentityTheft.gov to see what steps to take, including how to monitor your credit.

Photo credit: iStock/eggeeggjiew

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SoFi does not currently offer all the products and services in this article. Our content covers a variety of financial topics for educational purposes only.

Consumers often use cashier’s checks for larger purchases because they offer the recipient of the funds extra security. That’s because cashier’s checks are guaranteed by a bank, rather than the purchaser.

Unfortunately, printing technology has improved over recent decades, making it easier for scammers to print fraudulent cashier’s checks at home and trick unsuspecting consumers into accepting them as legitimate forms of payment. Knowing how to spot a fake cashier’s check is crucial to avoiding these scams.

Learn how cashier’s checks work, common scams using them, and how to protect yourself.

At this time, SoFi does not offer cashier’s checks.

What Is a Cashier’s Check?

A cashier’s check is a check issued and guaranteed by a bank or credit union. This typically instills confidence in the recipient that the check won’t bounce when they deposit it at their own financial institution. They are common in real estate transactions and when making large purchases.

When you deposit a cashier’s check in your checking account, the money usually clears faster than a traditional personal check. Cashier’s checks can be more secure because they are more challenging to forge — though it’s not impossible.

Recommended: Certified Check vs. Cashier’s Check

How Do Cashier’s Checks Work?

Cashier’s checks are like a prepaid check. If you need to pay someone with a cashier’s check, you can go to your bank to purchase one. The money will immediately leave your account, and you can give the cashier’s check to the person or business as payment. When they deposit the cashier’s check, your bank will release the funds to cover the cost.

•   If you don’t have a bank, you may still be able to get a cashier’s check from a financial institution. Rather than withdraw the funds from your account, the bank would instead require that you pay cash to have a cashier’s check issued.

•   Cashier’s checks are usually not free. On top of the amount to be paid with the check, banks usually charge around $8 to $15 to issue a cashier’s check.

4 Common Cashier’s Check Scams

Just as there are many types of bank fraud in general, cashier’s check scams run the gamut, but most follow a similar structure. Typically, a fraudster will give you a fake cashier’s check that looks real, and they’ll ask you to deposit it and then send some money back to them. Afterward, the bank will discover that the original cashier’s check was fake — and you’ll owe all the money back, including the amount you sent to the scammer.

Here are the specifics on a few common scams to watch out for:

Employment Scams

Two popular employment scams include fake cashier’s checks:

•   Mystery shopper scam: In this scam, the fraudster will hire people to report on the quality of various money transfer businesses as mystery shoppers. As part of the assessment, the victim of the scam will receive a cashier’s check to deposit at a local bank, then send the money back to the employer through a money transfer service (say, a wire transfer) to evaluate the service. After sending the cash back to the fake employer, the victim will learn from the bank that the cashier’s check was fraudulent. Instead, the funds sent to the scammer came out of the “real” funds in their bank account.

•   Work-from-home scam: Another employment scam involves hiring remote employees and sending them an overpayment. The supposed employer might send a starting bonus via cashier’s check. The fake employer just asks that new employees pay an account activation fee to cover the cost. If successful, the scammer will receive the funds for this fee before the victim realizes the cashier’s check is fake.

In addition, some remote work scams may be overpayment scans, described below.

Windfall Scams

Windfall scams are common and often involve a cashier’s check. In a popular scheme, scammers will lead victims to believe they’ve won the lottery (usually a foreign lottery); in others, victims will learn they’ve received an inheritance.

To claim the earnings, however, the victim must pay taxes and fees. They’ll cash the fake cashier’s check they have been sent and wire money to the scammer before learning that the cashier’s check was fake. You’ll then have to repay the bank — and be out the money you paid the fraudster.

Recommended: Terrible Financial Advice to Avoid

Purchase and Overpayment Scams

The overpayment scam is a common type of cashier’s check fraud. If you sell a product to someone online, like through an online auction or marketplace (eBay, Craigslist, Facebook Marketplace), the scammer may send you a cashier’s check for more than the purchase price.

When you point this out to the scammer, they’ll apologize, say they made a mistake, and ask you to send the difference back to them. After you send them some money, you’ll discover that the original cashier’s check was fake — so you’ll have lost money as well as the product you’re selling.

In other cases, the buyer may give you a cashier’s check for the right amount. You’ll ship them the product, only to later discover the check was fake. While you aren’t out any money, you’re still out the product.

Overpayment scams may also take the form of remote work scenarios. You will be sent a check and then be asked to forward a portion of it to another party as part of your “new job.” Alas, if you do so, you could discover the check was a fake and the money you forwarded is now lost.

Property Rental Scams

If you are a landlord renting out a property, be wary of cashier’s checks. In some cases, scammers may offer to pay the first and last months’ rent payment plus the security deposit without ever seeing the property — often because they claim they are moving for a new job and need a place fast.

They’ll send you the money via cashier’s check, then back out of the rental, saying the job fell through. The scammer will offer to let you keep the security deposit but ask if you’d be willing to wire any of the prepaid rent back. Only after sending the money will you realize the scammer paid you with a fake cashier’s check.

Tips for Spotting Fake Cashier’s Checks

Wondering how to spot a fake cashier’s check? Here are a few tips:

•   Check the bank name: Some scammers utilize real banks’ names and information, which makes it harder to differentiate between a real and fake cashier’s check. But a dead giveaway is a cashier’s check with a fake bank name. A quick online search can help you identify a bogus name.

•   Check the postmark: If you received the check in the mail, the postmark city should match the city of the supposed bank.

•   Verify the amount: A cashier’s check for the incorrect amount could be the sign of a scam in the works, such as an overpayment ruse.

•   Look for security features: Real cashier’s checks use a combination of security features, like color-changing ink, security threads, and watermarks. While fake cashier’s checks might contain these as well, a check without these hallmarks is an obvious indication of a scam.

•   Check the payee name: If the payee’s name line is blank, you are probably in possession of a fake cashier’s check.

Recommended: How to Build Financial Security

Tips for Avoiding Cashier’s Check Scams

Knowing how to spot a fake cashier’s check can be helpful, but here are some tips for avoiding scenarios where you’d receive a fraudulent cashier’s check altogether:

•   Only accept cashier’s checks from people you know and trust.

•   Consider a traceable online payment system for doing business, instead of a cashier’s check.

•   Accept cashier’s checks only for the agreed-upon amount, never more.

•   Use your judgment: If someone is sending you money you weren’t expecting, especially if they’re a stranger, it’s likely too good to be true.

•   Don’t agree to send anyone money until you’ve verified with your bank that the cashier’s check has cleared and was free of fraud.

Verifying Cashier’s Checks

If you are accepting this kind of check, it’s important to learn to spot a real vs. fake cashier’s check and keep your eyes peeled for signs of fraud. A good way to avoid a cashier’s check scam can be to verify the check with the issuing bank. You can call or visit the bank in person, if there’s a branch nearby.

Just don’t use the phone number that might be printed on the questionable check, as it may go to the scammer. Instead, search for the bank online, find its legitimate website, and call the customer service number. Provide the check number, issue date, and amount — and the bank should be able to verify if the check is legitimate.

Do Victims of Cashier’s Check Fraud Have Any Recourse?

If you have already sent money to a scammer in an untraceable way, like via wire transfer, you may not be able to get your money back. Banks can deduct the amount of the fraudulent check from your account or require you to pay for the amount you withdrew using the fraudulent check. Some points to note:

•   You can report the fraud to the United States Postal Inspection Service (if the check came in the mail), your state or local consumer protection agencies, and the Internet Crime Complaint Center.

•   You can contact the bank whose name appeared on the fake cashier’s check, as well as the bank where you deposited the fake cashier’s check. Additionally, you’ll want to notify the platform on which you first encountered the scammer (for example, an apartment rental site or an online marketplace).

•   Submit a formal complaint to the Federal Trade Commission (FTC), and file a police report with the local police.

These steps may help you resolve the case and/or prevent the scammers from perpetuating more fraud.

Recommended: What Is an E-Check?

The Takeaway

Cashier’s checks are a legitimate form of payment often used in high-dollar transactions or to add a sense of confidence between buyers and sellers who don’t know each other. However, they can be easy for scammers to forge, so it’s important to stay alert when receiving a cashier’s check as payment. Knowing the difference between a real vs. fake cashier’s check can be an important skill in protecting your finances.

FAQ

How can I verify if a cashier’s check is real?

You can inspect a cashier’s check for obvious signs that it’s a fake, like a missing payee name, a fake bank name, and incorrect amounts. But if you’re dealing with a more sophisticated fake cashier’s check, your best bet is to find the bank online, call their customer service number, and ask them to confirm the check’s authenticity.

What happens if you deposit a fake cashier’s check?

Once the bank discovers that the cashier’s check you deposited was fake, they’ll deduct that amount from your account or seek repayment some other way. In instances where you’ve sent some money back to the scammer, you’ll be out that money. In instances where you sold goods to a scammer, you’ll unfortunately be unlikely to get the item back.

Can a bank tell if a cashier’s check is real?

Bank tellers may also have difficulty determining if a cashier’s check is fake or real. While they can spot the more obvious signs, more sophisticated scammers can slip fake cashier’s checks past bank tellers. Internally, banks eventually discover that the cashier’s check is fake (usually a couple of weeks later when it’s returned unpaid), long after the fraudster has gotten away with their scam.

Photo credit: iStock/Richard Stephen

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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

When an unauthorized transaction is reported, a bank typically gathers information, analyzes the incident, and makes a determination about what happened and what the next steps will be.

In today’s era of digital commerce and banking, there are a number of options that can make it easier to pay for goods and services, such as online bill pay, debit cards, and mobile wallets.

Sometimes, however, despite your best efforts to keep your private information secure, you may discover an unauthorized transaction. If this happens, know that banks work hard to investigate and resolve this kind of issue in several ways. Learn more here.

What Are Unauthorized Transactions?

Unauthorized transactions are any bank account transactions that the account holder did not approve of. It could be a payment that was mistakenly charged to your account, but it could also indicate fraudulent activity. For instance, a criminal might write a fraudulent check from your checking account or use your debit card to make an unauthorized withdrawal from your bank account without your knowing it.

There are a number of different methods fraudsters may use to try to get access to your checking account, including:

•   Stealing and “washing” a check (meaning erasing the original information and adding fraudulent details)

•   Stealing your debit card (or finding a lost debit card)

•   Stealing your information with card skimmers and hidden cameras

•   Conducting a scam in which they try to convince you to share your confidential account info

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

Initial Detection of Unauthorized Transactions

There are two main ways to detect unauthorized transactions:

1.    You as the account holder may notice a transaction in your checking account that you did not authorize. If you have bank alerts set up for your account, you may also get a push notification about a transaction you did not make.

2.    The bank itself may detect the unauthorized transaction. Banks have advanced fraud detection methods, including pattern recognition, machine learning, artificial intelligence, behavioral analysis, geolocation data, and more that can tip them off when a transaction appears to be fraudulent.

If you as the customer notice the bank account fraud, it’s crucial that you contact your bank’s fraud department immediately (the number is typically on the back of your debit card). A representative can walk you through next steps, such as:

•   Canceling or freezing your debit card

•   Ordering a new card

•   Updating your bank account password (and ideally your email password as well)

•   Starting a formal fraud investigation with the bank

If the bank’s fraud detection software notices a suspicious transaction, the bank will generally contact you via text, email, or phone call to verify the transaction. If you don’t recognize the transaction, the bank will begin its fraud investigation.

Recommended: How to Report Identity Theft

Bank Investigation Process

When consumers report potential fraud, banks generally have 10 business days to investigate the transaction (20 business days if the account was opened in the last 30 days). Once the bank has determined there was an error, it has only a single day afterward in which to correct it.

If the bank can’t complete its investigation within 10 or 20 business days, it must issue the consumer a credit to the account for the disputed amount, minus $50, while the investigation continues. Usually, the bank or credit union has up to 45 days to finish their investigation and share their findings. In some cases (such as if the incident occurred in a foreign country), it may take up to 90 days to achieve a final resolution.

Whether you as the consumer bring the unauthorized transaction to the bank’s attention or the bank’s fraud detection system finds the issue, the bank or credit union will typically investigate as follows:

1.    Gather transaction details. The bank’s fraud team will collect as much information about the transaction as it can, including the time and date, the merchant, and the amount. They’ll also analyze other transaction patterns and consumer behavior.

2.    Make a determination. Based on these details, the bank should be able to determine if the transaction was unauthorized or if there are fraudulent charges — and if the merchant has any blame in the scenario.

3.    Take action. The bank may or may not reimburse the customer, depending on their findings. Further, the bank may pursue charges against the criminal, if applicable and possible. The bank will also file a suspicious activity report (SAR) if that is deemed appropriate and hand the case over to the authorities.

Recommended: What Can Someone Do With Your Bank Account and Routing Number?

Fraud Prevention Measures

Even consumers who take the strictest safety measures can be victims of bank fraud. Nevertheless, it’s worth doing everything in your power to avoid unauthorized transactions, including:

•   Using unique, complex passwords. Your email, financial accounts, and any other online accounts should have unique and complex passwords. These should be updated often and never reused or shared. You might want to consider using a password manager service to assist with this.

•   Turning on alerts. Bank alerts can be helpful in spotting fraud in real time. Turn on all relevant alerts available in your bank’s mobile app or on its website. You can also monitor your transactions in app or on the site and balance your checking account regularly to help you identify unauthorized charges.

•   Using all the security measures available to you. Multifactor authentication (MFA) and biometric screening (such as facial recognition) add extra layers of protection on top of passwords.

•   Not sharing your PIN. Think of a unique PIN for your debit card, and don’t share it with anyone.

•   Protecting your wallet. Always be smart about where you stash your wallet. Also consider using an RFID wallet. This can block contactless scanning of your cards’ chips, which hold your confidential banking details. Only carry the cards you need; keep the rest at home in a safe.

•   Being careful at ATMs and points of sale. Make sure no one is watching you punch in your PIN when making a transaction (they could steal your card and then use it). Always check ATMs and gas pumps for signs of card skimmers, or devices that fit over the slot where you dip your card and steal your credentials.

•   Recognizing phishing scams. Fraudsters are always finding new ways to get account information. Educate yourself about the latest phishing and bank scams, and always be wary when someone asks for your account information. Just because someone calls or texts saying they are “from your bank” doesn’t make it true.

The Takeaway

Just as it’s important to take basic security measures to prevent your financial information from getting into the wrong hands, it’s also crucial to act quickly if you detect an unauthorized charge on your debit card or a fraudulent transaction in your account. Banks must take reasonable steps to investigate unauthorized transactions and notify you of the results in a timely manner.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with SoFi, NerdWallet’s 2024 winner for Best Checking Account Overall.* Enjoy up to 3.80% APY on SoFi Checking and Savings.

Open an account

FAQ

What triggers a bank investigation of unauthorized transactions?

If you don’t recognize a charge in your checking account, you should report the unauthorized transaction to your bank right away to trigger an investigation. To do so, contact your bank’s fraud department. Banks also monitor your account for fraudulent charges and may contact you if their security measures detect an unauthorized transaction.

How long does a bank investigation typically take?

In most scenarios, banks have 10 business days to investigate a fraudulent transaction after you report it. If they can’t finish it in that time, they may have to credit your account while they continue the investigation. In total, banks and credit unions have 45 business days to resolve an issue, except for some specific exceptions (like if the fraud occurred in another country).

What actions can customers take to help prevent unauthorized transactions?

To help prevent unauthorized transactions from hitting your checking account, you can use a strong password and opt in to multifactor authentication or biometric screening; turn on fraud alerts; be cautious when using your debit card in public; and freeze or cancel your card if you lose it, among other habits.

Photo credit: iStock/NoSystem images

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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

Judging from the latest statistics, the most lucrative work-from-home job in America may be Con Artist. Fraudsters are utilizing texts, social media, fake websites, apps, emails, and old-fashioned voice calls to separate Americans from their money — billions every year. They play on our greed, or charity, or desperation. And they take all forms of payment.

The best way to fight back against fraud is to be aware of current schemes so you don’t fall victim in the first place. Below we share the top financial shakedowns, with enough details to help you recognize red flags, and statistics that will blow your mind. Read on to learn how to avoid getting fleeced (and how to report it if you are).

Identity Theft and Credit Card Fraud Trends

If you’ve been the victim of identity theft or credit card fraud, you’re hardly alone.

According to the Federal Trade Commission (FTC), there were 552,000 reported cases of identity theft through the first half of 2024. At this rate, the year is on track to surpass the number of reported cases in 2023.

Meanwhile, there were 214,607 reported cases of credit card fraud by mid-year, up 6% from the previous six months. The impact of both crimes can be substantial. In 2023 alone, some 2.6 million consumers collectively lost more than $10 billion to fraud — a 14% increase from 2022.

There are several potential reasons for the surge. More people are turning to digital tools to handle everyday tasks, like shopping and banking. At the same time, scam email messages — no, that’s not the U.S. Post Office — have also spiked in recent years. And finally, the rise of crypto seems to play a role: The FTC has warned consumers that no reputable utility or creditor will demand payment only in crypto.

If you’re a victim of credit card fraud, it’s important to report it ASAP. You can get your credit report and find out your credit score for free at AnnualCreditReport.com®.

You can also enlist the help of a money tracker app, which allows you to manage all of your finances from one convenient dashboard.

Recommended: What Credit Score Is Needed to Buy a Car?

33 Identity Theft and Credit Card Fraud Stats

Below we do a deep dive into the most common types of fraud: imposters, online shopping scams, fake prizes and sweepstakes, false job opportunities, fictional charities, investment swindles, and more. All numbers quoted below are from 2023 FTC data.

1 Imposters: Reports Filed

The total reports filed in this one category came to 853,935, with 21% of filers admitting losses. An imposter is a person who pretends to be someone else to steal your personal information or money. They might call, text, or email you and may pose as someone you know. (“I’m on vacation in London and lost my wallet! Can you send me some cash?”).

2 Imposters: Losses

The median loss suffered by victims was $800. The total dollar amount of imposter scam losses was $2.668 billion.

3 Imposters: Scenarios

The most common way imposters approached targets was via email, and victims often paid via credit card.

4 Imposters: Top States Affected

Oregon led with 2,640.7 reports per million people. Washington and Colorado followed close behind.

Recommended: What Is a Tri-Merge Credit Report?

5 Online Shopping: Reports Filed

Total reports filed came to 369,469, with 53% claiming losses. In an online shopping scam, someone pretends to have a legitimate business by creating a phony website or posting fake ads on a real retailer’s site.

(Another form of this fraud is when scammers create and post fake negative reviews of small businesses and then tell owners that they’ll remove the reviews in exchange for digital gift cards.)

6 Online Shopping: Losses

The median loss suffered by victims was $125. The total dollar amount of online shopping scam losses totaled $392 million.

7 Online Shopping: Scenarios

Victims are most often taken in by websites or apps — not surprising, given the nature of this fraud — and are asked to pay via gift card.

8 Online Shopping: Top States Affected

Delaware led with 1,183.4 reports. New Hampshire and Colorado placed second and third.

9 Prizes & Sweepstakes: Reports Filed

Total reports filed came to 157,520, with 13% reporting losses. “Great news!,” a voice over the phone gushes. “You’ve won money or valuable prizes!” All the winner needs to do is provide their bank account information or pay a processing fee.

10 Prizes & Sweepstakes: Losses

The median loss suffered by victims was $878. Total losses equaled $338 million.

11 Prizes & Sweepstakes: Scenarios

Phone calls, texts, and emails are the most common contact method. Gift cards were of the top payment types.

12 Prizes & Sweepstakes: Top States Affected

West Virginia topped the list with 781.2 reports. Delaware and Alabama placed and showed.

13 Internet Services: Reports Filed

Total reports filed equaled 125,118, with 7% admitting losses. This category includes the use of fake messages or copycat sites — ostensibly from someone’s internet service provider — as part of a phishing or spoofing scam used to commit identity theft. It also includes theft of personal information: debit card PINs, credit card and bank account numbers, and passwords.

14 Internet Services: Losses

The median loss suffered was $250. Total losses came to $36 million.

15 Internet Services: Scenarios

Typically, individuals are contacted via social media and send money via payment app.

16 Internet Services: Top States Affected

Delaware was first in line with 418.6 reports per million people. Nevada and Florida came close on its heels.

17 Job Opportunities: Reports Filed

Total reports filed were 110,364, with 32% reporting a loss. Scammers post genuine-looking want ads and business opportunities in print and online. The catch? There is no job. They just want your personal information and your money. As just one example, a “work-from-home career” starts after the target pays for training, certifications, and/or starter kits.

Recommended: Should I Sell My House Now or Wait?

18 Job Opportunities: Losses

Consumers experienced a median loss of $2,137. Total losses reached $491 million.

19 Job Opportunities: Scenarios

People are most often connected by text and pay the scammers via cryptocurrency.

20 Job Opportunities: Top States Affected

Nevada was again the top contender, with 408.3 reports per million people. Arizona and Georgia achieved second and third place.

21 Advance Payments: Reports Filed

Total reports came to 29,878, with 35% of them suffering a financial loss. Advance payments, as the name implies, refer to a consumer pre-paying for a service. Credit service businesses purport to sell information that will allow the consumer to create a new credit file — perhaps after an identity theft occurred.

22 Advance Payments: Losses

The median loss of each victim was $638. The total amount lost was $75 million.

23 Advance Payments: Scenarios

Fraudsters typically communicate with potential victims via websites and apps for this kind of scam, and request wire transfers to collect the money.

24 Advance Payments: Top States Affected

Mississippi is number one this time, with 152.3 reports per million people. Georgia and Florida follow as numbers two and three.

25 Fake Charities: Reports Files

Total reports came to 9,809, with 27% reporting a monetary loss. Scammers pretend to be from a real or fake charity and ask you to make a donation right then for, say, a natural disaster that just occurred.

26 Fake Charities: Losses

The median loss was $392. The total amount lost was $22.5 million. Asking people to support a heartwarming cause has, unfortunately, been quite successful.

27 Fake Charities: Scenarios

Messages go out via social media, and have the potential to go viral. Scammers most often collect their money through a payment app.

28 Fake Charities: Top States Affected

Alaska led the way with 38.0 reports per million people. Georgia and Nebraska came in second and third place.

29 Investments: Reports Filed

Total reports came to 107,699, with 75% claiming a financial loss. With investment fraud, a scammer tries to get you to invest: in stocks, bonds, real estate, whatever. They may provide false information about a real investment or make something up entirely.

30 Investments: Losses

The median loss was $7,768. Total losses equaled $4.642 billion.

31 Investments: Scenarios

These so-called investment opportunities are described on social media platforms, with cryptocurrency being the top payment method.

32 Investments: Top States Affected

Nevada (again!) leads the way, with 289.9 reports per million people. Florida and Arizona trail behind in terms of percentage of population, but are way ahead in absolute numbers: Washingtonians filed 1,074 reports; Californians, 5,349 reports.

33 Bonus Stat: Tax Prep

A missing refund is one sign that someone else may have filed a fake tax return in your name. Here’s more information about what to do when you don’t receive a tax refund.

The FTC notes that 5,949 reports about tax preparation fraud were filed in 2023, with 10% of people reporting a monetary loss. The total loss was $1.9 million with a median loss of $500.

How to Avoid Credit Card Fraud

As these numbers show, there are plenty of scammers out there. Here are some ways to protect yourself against money scammers:

•   Avoid using debit cards, which are directly connected to your bank account. Credit cards and payment apps tend to be safer. Check your banking and credit card statements regularly, watching for errors and suspicious charges.

•   If your bank offers free transaction alerts, sign up now. For example, you can get an alert whenever a large payment (you choose the number) hits your account. Find out more about different types of bank fraud.

•   If you get a call from a company asking for payment data or other personal information, hang up. If it’s a company you normally deal with, call them back directly to see if the call was genuine.

•   Use password protection on your smartphone and computer devices. Keep your browsers up-to-date, and use reputable anti-virus software downloaded from the app store (not an ad, email or website). Avoid using public WiFi.

•   Shop at reputable retailers only, including but not limited to the ones you use online. If you have questions about a store, check them out on the Better Business Bureau website.

•   When pumping gas or using an ATM, watch out for skimmers: devices that capture your account information for fraudulent purposes. If anything looks odd, let the establishment know.

•   Be cautious about clicking on links from unknown sources, checking to make sure that an email or text message really came from the place it claims and is a reputable organization.

•   Monitor your credit report and watch for inaccuracies. What qualifies as credit monitoring varies, so look for services that send alerts whenever something new hits your report. You may also be able to sign up for free credit monitoring.

How to Report Credit Card Fraud

The first step is to file a dispute with your credit card company. Then you can contact your police station or sheriff’s office. You can also report the fraud to your state’s attorney general (get their contact info from https://www.naag.org/find-my-ag/) You can also submit an online claim with the FTC at https://reportfraud.ftc.gov/#/

The Takeaway

Scammers are reaching out via text, social media, fake websites, apps, emails, and old-fashioned voice calls to separate you from your money. Their stories play on your greed, or charity, or desperation. And they take all forms of payment — but they especially like gift cards and crypto. By learning to recognize the top schemes, you can help protect yourself from getting swindled. More pro tips: Monitor your transactions, avoid using debit cards for purchases, and don’t ever give out your personal or financial info unless you’re 100% sure of who you’re dealing with.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

SoFi helps you stay on top of your finances.

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FAQ

What are some common credit card scams?

Scammers can be pretty creative. Phishing is when a con artist tries to get you to share personal info or credit card information on the phone, by email, or text. Fake online websites can be built to steal credit card info. Skimmers can be set up on ATMs and credit card readers. And people with ill intent can monitor public WiFi for credit card info. And these are just some of the types of financial fraud out there.

How do credit card scams happen?

Sometimes, your physical credit card can be stolen. More often, someone gets your credit card data without having the actual card. Identity thieves can also steal personal information, set up credit cards in your name, and start spending.

How can you spot credit card fraud?

As you monitor bank statements, credit card statements, and your credit report, you may spot information that just isn’t right. Although this isn’t always because of credit card fraud, that’s a common cause. Proactively investigate when something looks suspicious. You can also set up alerts with your bank to flag certain kinds of transactions.

Photo credit: iStock/SaskiaAcht

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This content may include information about products, features, and/or services that SoFi does not provide and is intended to be educational in nature.

It’s never a good feeling to look at your credit card statement and wonder, “What is this charge on my credit card?” When it comes to fraudulent credit card charges, your bank has often got your back. They have methods for spotting activity that isn’t normal, and they’ll usually alert you when a charge seems suspicious.

That said, your bank might not catch everything, and there may be a charge that’s valid but the amount is incorrect. So it’s important that you, too, keep an eye on your credit card statement to catch these errors and report anything that’s amiss immediately.

Here’s what to watch out for and tips for handling a dispute.

What Are Fraudulent Credit Card Charges?

Credit card fraud can happen if someone steals your card or the information on your card, or hacks into your account. Someone could do so by stealing your physical card, skimming your card information at a credit card terminal, through phishing scams via text or email, or by stealing your mail. Fraudsters then use the information they’ve stolen to make unauthorized purchases on your credit card.

Most cards offer zero liability on fraudulent charges, meaning you won’t be responsible for covering charges you didn’t authorize. This is an important feature of how credit cards work. However, it’s important that you catch fraudulent charges early so you can report them quickly and minimize your liability.

Recommended: Tips for Using a Credit Card Responsibly

Detecting Unauthorized Credit Card Charges Early

The key to spotting unauthorized charges on your credit card is remaining vigilant and always checking your credit card statement each month. When you receive your statement, follow these steps:

•   Review statements immediately. Avoid letting a few months of credit card statements accumulate before checking them. Whether you look them over online or via hard copy, do so ASAP so you can catch errors and head off fraud as quickly as possible. Going through your statements regularly will also offer a clearer understanding of how credit card payments work.

•   Check every purchase. Fraudsters know that small unauthorized credit card charges are less likely to get flagged. Go down the list of purchases you’ve made on your card over the last month and make sure you recognize the merchant and can match the sale with an item or service you bought.

•   Keep receipts. Hang on to receipts from credit card purchases so you can match them up to the items in your statement. This can also help if you’re unsure of how to identify a credit card transaction.

Fraudulent Credit Card Charges vs Billing Errors

Fraudulent charges are a result of theft. However, sometimes you may be charged for something that was due to a billing error. For example, perhaps you were charged twice for an item, or you were charged for goods or services that you never received.

Other billing errors could include:

•   Unauthorized charges, for which federal law limits your liability to $50

•   Charges that list the wrong date or amount

•   Errors in math

•   Charges for goods or services that you didn’t accept or weren’t delivered as agreed

•   Failure to post payments or credits, such as after you’ve returned an item.

You can correct these errors using procedures laid out by the Fair Credit Billing Act (FCBA). If a charge is found to be made in error, your credit card company will carry out a credit card chargeback, reversing the charges.

Reporting Unauthorized Credit Card Charges

Procedures for reporting fraud and billing errors are slightly different.

If you suspect fraud, you’ll take the following steps:

•   Contact your card issuer immediately. Tell them you suspect that you’ve been a victim of fraud. Your issuer can then investigate the charge.

•   Ask for your accounts to be suspended or closed, and ask to be issued a new card. Change passwords and personal identification numbers (PINs) on your accounts.

•   File an identity theft report with the Federal Trade Commission (FTC). You can do so at Identitytheft.gov .

•   Contact the three credit reporting bureaus, Equifax^®, Experian^®, and TransUnion^®. Confirm your identity with them and check your credit reports for any other fraudulent activities. Consider having a fraud alert connected to your accounts.

If you’re disputing a billing error, first call your credit card company and alert them to the error. The credit card company will investigate. If they find there was an error, your account will be corrected, and you will not pay credit card purchase interest charges on the amount for which you were billed.

In addition, send your credit card company written notification of an error. Use FBCA procedures to dispute the credit card charges, including the following steps:

•   Contact the creditor at the address they provide for billing inquiries. This address may be different from the one to which you send payments. Include your name, address, and account number, as well as a description of the billing error you’ve spotted. You may be able to proceed online or by phone as well as through the mail. The FTC provides a sample letter that you can use as part of the process.

•   Include copies of receipts and other supporting documents.

•   Be sure to mail your letter within 60 days of the first bill you received that contained the error.

•   Send the letter by certified mail and ask for a receipt so you can be sure your creditor received it.

•   Keep a copy of the dispute letter.

How to Read Your Credit Card Statement

It’s important to get familiar with how to read your credit card statement. The Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) requires that each of your credit card statements includes certain pieces of information.

•   First, there should be a section that includes your account information. This is where you’ll find your name, account number, and the date of the billing cycle.

•   Next, the account summary is an overview of transaction information on your card. This section will include the payment due date, any payments or credits that have been applied to the account, any fees that have been charged to you, and the total amount of your account balance.

•   Following this summary is a detailed account of the purchases you’ve made over the billing period. Each line item will include the vendor name, the date the purchase was made, the category (such as “groceries”), and the amount that was charged to your card. Go through this section carefully as you look for fraudulent charges or charges in error. This is how to find who charged your credit card.

•   Your statement will include other sections that detail payment information, interest or credit card finance charges, rewards, and account fine print.

Credit Card Security and Fraud Protection

When you apply for a credit card, carefully look at the security measures the card issuer has in place. Credit cards, such as the credit card offered by SoFi, can have a variety of measures to keep your information safe and protected from fraud.

Fraud protection limits your responsibility and liability for fraudulent charges. Many banks offer $0 liability. The FCBA limits liability to $50 for card-present fraudulent charges, and $0 if the card is not present, such as for online charges made with stolen credit card information.

Recommended: Does Applying For a Credit Card Hurt Your Credit Score?

The Takeaway

Fraudulent charges or billing errors can be an unfortunate part of having a credit card. Your bank may catch them, but it’s also important to be proactive and keep an eye out for fraud and errors on your credit card statement. Bringing them to the attention of your credit card company will help you get the issue sorted faster and head off potential future fraud.

Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

How do I file a fraudulent charge claim with my credit card company?

If you spot a fraudulent charge on your credit card statement, call your card company immediately and ask them to investigate. They can guide you through the process of disputing the charge.

How do I find out where a charge came from?

You can see where a charge was made in the detailed purchase information provided on your credit card statement.

How do I look up a charge from my credit card statement?

If you’re unsure about a charge on your credit card statement, call your credit card company, which may be able to do a credit card charge lookup by the merchant.

Photo credit: iStock/Pekic

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