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Chapters (12)

Banking and financial scams

Financial scams target your bank accounts, credit cards, and payment apps. This chapter covers how to protect your finances from sophisticated attacks.

The Financial Fraud Landscape

Financial services/SaaS/Webmail: 23.3% of phishing attacks
Banking segment: 11.9% of attacks in Q3 2024
$4.4 billion lost to payment app fraud in 2024
$870 million lost via Zelle since 2017
$2 billion lost through bank transfers in 2024
Zelle/Venmo/Cash App payments are immediate and irreversible

Common Banking Scams

1. Fake Fraud Alerts

Example:

“Bank Alert: Suspicious $500 charge detected. Call 888-555-0123 immediately to verify.”

Red flags:

Phone numbers in messages (banks use known numbers)
Pressure to call immediately
Requests to verify by making payments
Links to click for account access

What real banks do:

Call from known numbers on your card
Never ask for full account numbers or PINs
Don’t send login links via text/email
Give you time to verify through official channels

2. Account Verification Scams

The tactic: Fake emails/texts claiming your account needs verification or will be closed.

Red flags:

Threats of account closure
Links to “verify” account
Urgent 24-48 hour deadlines
Requests for passwords or PINs

Protection:

Log into your account directly (type URL)
Call bank using number on your card
Banks send mail for important changes
Never verify via email/text links

3. “Verify Yourself” Zelle Scams

How it works:

Scammer initiates Zelle payment TO you
You receive verification request
Scammer calls pretending to be bank
Claims you need to “verify” by sending money back
You send money = you just paid the scammer

Average loss: Can be thousands of dollars

Protection:

Never “verify” by sending money
Zelle verification doesn’t work this way
Hang up and call bank directly
Banks never call asking you to send money

Payment App Specific Scams

Zelle

Vulnerabilities:

Instant, irreversible transfers
Tied directly to bank accounts
Limited fraud protection
No buyer/seller protection

Common scams:

Fake fraud department calls
Overpayment scams
Marketplace payment fraud

Protection:

Only use with known, trusted people
Verify recipient before sending
No buyer protection - not for purchases
Can’t reverse transactions

Venmo / Cash App

Vulnerabilities:

Public transaction feeds
Friend impersonation
Payment reversals (chargebacks)

Common scams:

“Accidental” payments asking for refunds
Fake buyer protection schemes
Friend account compromises
Public username phishing

Protection:

Make transactions private
Verify friend requests
Don’t send to strangers
No goods/services protection

PayPal

Common scams:

Fake invoice scams
Shipping confirmation phishing
Account limitation emails
Friends & Family payment fraud

Protection:

Use Goods & Services for purchases
Verify emails are from @paypal.com
Check account through official app
Report suspicious invoices

What Banks NEVER Do

Banks will NEVER:

Call asking for your PIN, password, or full account number
Send login links via email or text
Ask you to transfer money to “verify” your identity
Request you install software or apps
Threaten immediate account closure
Ask you to move money to a “safe account”
Contact you via social media DMs

What Banks Actually Do

Banks WILL:

Call from known numbers (on your card)
Send secure messages through their app/website
Send important notices via mail
Give you time to respond
Allow you to verify through official channels
Have in-branch options for problems

Cryptocurrency Wallet Safety

Risks:

Irreversible transactions
No FDIC insurance
No chargebacks
Easy to send to wrong address

Protection:

Store seed phrases offline
Never share seed phrases or private keys
Use hardware wallets for large amounts
Verify addresses character-by-character
Test with small amounts first
Enable all security features

Verification Procedures

Before Banking Actions:

Pause - Never act on urgent requests
Verify sender - Check email/phone legitimacy
Independent check - Log in directly, not via links
Call official number - From card or bank website
In-person option - Visit branch if unsure

For Payment Apps:

Know recipient - Only send to trusted contacts
Verify requests - Call friend if asking for money
Double-check amount - Can’t undo most payments
Screenshot details - For your records
Use protection - PayPal Goods & Services for purchases

Security Best Practices

Account Protection:

Strong unique passwords for each financial account
Two-factor authentication (preferably app-based)
Transaction alerts for all activity
Regular monitoring - Check statements weekly
Freeze credit when not actively using
Password manager to generate/store passwords

Safe Banking:

Type bank URLs manually or use official apps
Never use public WiFi for banking
Keep software/apps updated
Use secure, private networks
Log out after each session
Set up account alerts

Payment App Safety:

Only link one bank account/card
Enable all security features
Make transactions private
Verify recipients carefully
Don’t use for business transactions
Keep minimal balance

If You’ve Been Scammed

Immediate Actions:

Call your bank - Use number on card immediately
Freeze account - Prevent further transactions
Dispute charges - File fraud claim
Change passwords - All financial accounts
Enable 2FA - If not already active

Within 24 Hours:

File police report - For identity theft
Report to FTC - IdentityTheft.gov
Report to FBI - IC3.gov for large losses
Credit freeze - With three bureaus
Monitor credit - Watch for new accounts

For Payment Apps:

Report to app - Within their systems
Contact recipient bank - If you have info
File complaint - With CFPB
Document everything - Screenshots, conversations

Recovery Reality:

Bank transfers: Very low recovery rate
Credit cards: Better protection, can dispute
Zelle/Venmo: Difficult to reverse
Cryptocurrency: Nearly impossible to recover

Key Takeaways

$4.4 billion lost to payment app fraud in 2024
Banks never ask for PINs or passwords
Payment apps = cash - instant and irreversible
Always verify through official channels
Type URLs manually - never click links
Enable 2FA on all financial accounts
Monitor statements regularly
Transaction alerts catch fraud early
Credit cards offer better fraud protection than debit
When in doubt, call bank using known number

Next chapter: Package delivery scams - how to spot fake delivery notifications and avoid shipping fraud.