What’s Trending in the Fraud Scene?

June 1, 2024

“For Mobile Deposit Only” Scam

In an age where convenience is king, mobile banking has become a staple for many. With just a few taps on your smartphone, you can deposit cheques, transfer funds, and manage your finances on the go. However, amidst this convenience lies a lurking danger: the “For Mobile Deposit Only” cheque scam.

While mobile depositing offers a quick and efficient way to handle cheques, scammers have found ways to exploit this technology for their vicious schemes. The scam typically involves fraudulent cheques marked with the phrase “For Mobile Deposit Only”. These cheques appear legitimate at first glance, but they are often counterfeit or stolen.

The method of the scam is simple yet effective. The scammer leads the member to believe that they are applying for an online loan. The victim, unsuspecting of any wrongdoing, gives the scammer/fraudulent loan company their banking information as well as their login credentials for online banking. Once the scammer has access to their victim’s online banking they deposit a “For Mobile Deposit Only” cheque, and send out the funds via e-transfer or bill payment to a money service business or crypto exchange. However, the real trouble begins when the bank discovers the fraudulent nature of the cheque. By then, the scammer has already disappeared with the member’s financial information, the funds they believed they were receiving from an online loan, and possibly additional funds the member had in their account, leaving the victim to face the consequences. The victim not only loses the money they thought they had received but may also be held liable for any fees or penalties associated with the fraudulent transaction.

To add insult to injury, victims of this scam may find themselves facing legal trouble, as depositing a fraudulent cheque is considered illegal activity. Even if done unknowingly, ignorance is not a defense in the eyes of the law. So, how can you protect yourself from falling victim to the “For Mobile Deposit Only” cheque scam? Vigilance is key.

How to Protect Yourself

1. Verify the source: Be wary of cheques from unfamiliar or untrusted sources, especially if they come with unusual instructions like “For Mobile Deposit Only”.

2. Inspect the cheque: Examine the cheque closely for any signs of tampering or irregularities. Look for discrepancies in the handwriting, printing quality, or paper texture.

3. Contact the issuer: If you have any doubts about the legitimacy of a cheque, reach out to the issuer directly to verify its authenticity.

4. Wait for clearance: Even if funds from a deposited cheque appear in your account, wait for the check to clear before using the money. This can take several days, but it’s worth the wait to avoid potential scams.

5. Report suspicious activity: If you suspect that you’ve received a fraudulent cheque or fallen victim to a scam, report it to your bank and the appropriate authorities immediately.

Online Loan Scams

In the age of digital finance, online loans have become a convenient option for many people in need of quick cash. However, with this convenience comes the risk of online loan scams. These scams can drain your bank account, steal your identity, and leave you in a financial mess. It’s crucial to recognize the warning signs and understand how to protect yourself. One of the biggest red flags in these scams is when a supposed lender asks to log into your online banking account. Under no circumstances should you allow this.

Understanding Online Loan Scams

Online loan scams come in various forms, but they typically follow a similar pattern. Scammers pose as legitimate lenders, often using professional-looking websites and convincing sales pitches to lure victims. They promise fast approval and easy access to funds, which can be particularly appealing to individuals with poor credit or urgent financial needs.

Common Red Flags of Loan Scams

1. Unsolicited Offers: Legitimate lenders do not send unsolicited loan offers via email, text, or phone calls. If you receive such an offer, it’s likely a scam.

2. No Credit Check Required: Reputable lenders assess your creditworthiness. If a lender promises a significant loan without checking your credit, be cautious.

3. Upfront Fees: Legitimate lenders charge fees that are typically deducted from the loan amount. If a lender asks for an upfront payment to process your loan, it’s a scam.

4. Pressure to Act Quickly: Scammers often create a sense of urgency to prevent you from thinking things through or doing proper research. They might claim the offer is limited or that you must act immediately.

5. Request for Personal Information: Be wary of lenders asking for excessive personal information upfront, such as your Social Insurance Number (SIN), bank account details, or other sensitive data.

The Biggest Red Flag: Access to Your Online Banking Account

One of the most alarming tactics used by loan scammers is asking for access to your online banking account. They might claim they need to verify your financial information, deposit the loan directly, or even help manage your loan repayments. Regardless of their reasoning, this is a major red flag. NEVER, under any circumstances, should you allow anyone to log into your online banking account.

Here’s why:

1. Immediate Access to Funds: Once scammers have access to your account, they can transfer your money out quickly, often before you even realize it.

2. Personal Information Theft: With access to your bank account, scammers can obtain sensitive information that can be used for identity theft or sold on the dark web.

3. Unauthorized Transactions: Scammers can initiate unauthorized transactions, leaving you with the burden of proving fraud to your bank.

4. Compromised Security: Giving someone your login credentials compromises your account security, making it easier for them to bypass other security measures like two-factor authentication.

How to Protect Yourself

1. Research the Lender: Before engaging with any online lender, research their credentials. Check for reviews, verify their business registration, and look for any complaints filed with consumer protection agencies.

2. Use Secure Websites: Ensure the lender’s website is secure. Look for “https” in the URL and a padlock icon in the address bar.

3. Read the Fine Print: Carefully read all terms and conditions before agreeing to any loan. Pay attention to interest rates, fees, and repayment terms.

4. Keep Personal Information Private: Never share your Social Insurance Number (SIN), bank account details, or other sensitive information unless you are certain the lender is legitimate.

5. Consult with a Financial Advisor: If you’re unsure about a loan offer, consult with a financial advisor or seek advice from a trusted source.

YNCU members, if you know, or think you have been a victim of an online loan scam or a mobile deposit only cheque scam and your banking information has been compromised, please contact our Service Excellence Centre at 1-800-413-YNCU (9628). You can also contact the Canadian Anti-Fraud Call Center at 1-888-495-8501.

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