Prevalent Fraud Schemes

Karen Nelson

Operational Risk Consultant

Wells Fargo Bank

Organized Crime Scams

Organized Crime Scams

Contact is made with established customer

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

A relationship is established over several weeks/months

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

A relationship is established over several weeks/months– A loan/payment is made to the customer

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

A relationship is established over several weeks/months– A loan/payment is made to the customer– A check is received & deposited by the customer

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

A relationship is established over several weeks/months– A loan/payment is made to the customer– A check is received & deposited by the customer– Funds are returned by wire/Western Union/Money

Gram to Nigeria, UK, or NY, etc.

Organized Crime Scams

Contact is made with established customer– Fax– Email– Phone

A relationship is established over several weeks/months– A loan/payment is made to the customer– A check is received & deposited by the customer– Funds are returned to Nigeria, UK, or NY– Check charges back to depositor, causing overdraft

Organized Crime Scams (twist)

Organized Crime Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet

Organized Crimes Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet– A bid is accepted that is higher than usual

Organized Crimes Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet– A bid is accepted that is higher than usual– The check received as payment is for a larger

dollar amount than the bid

Organized Crimes Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet– A bid is accepted that is higher than usual– The check received as payment is for a larger

dollar amount than the bid – Customer deposits the check and plans to

ship the item

Organized Crimes Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet– A bid is accepted that is higher than usual– The check received as payment is for a larger

dollar amount than the bid – Customer deposits the check and plans to

ship the item– The purchaser then requests the overage to

be wired back

Organized Crimes Scams (twist)

Internet sales (EBay)– Depositor sells an item on the internet– A bid is accepted that is higher than usual– The check received as payment is for a larger dollar

amount than the bid – Customer deposits the check and plans to ship the

item– The purchaser then requests the overage to be wired

back– The check charges back as “fraud” causing a loss

Inheritance Scams

Inheritance Scams

Contact is made– Fax– Mail– Email

Inheritance Scams

Contact is made– Fax– Mail– Email

A large sum is offered

Inheritance Scams

Contact is made– Fax– Mail– Email

A large sum is offered

A fee is requested– Usually a percentage of the inheritance

Inheritance Scams

Contact is made– Fax– Mail– Email

A large sum is offered

A fee is requested– Usually a percentage of the inheritance– When the heir can’t pay the fee, a sum is advanced

Inheritance Scams

Contact is made– Fax– Mail– Email

A large sum is offeredA fee is requested– Usually a percentage of the inheritance– When the heir can’t pay the fee, a sum is advanced– A check is received and deposited, the amount is

wired and the check charges back creating a loss

Lottery Scams

Lottery Scams

Elderly are targeted

Lottery Scams

Elderly are targeted– Customer removes large $$ in cash

Lottery Scams

Elderly are targeted– Customer removes large $$ in cash– Wire the funds

Lottery Scams

Elderly are targeted– Customer removes large $$ in cash– Wire the funds

Lottery Scams are also perpetrated the same as inheritance scams (Advanced fee)

*twist*

Compromised Email Accounts

Compromised Email Accounts

Customer’s email account is hacked.

Compromised Email Accounts

Customer’s email account is hacked An email is sent to the customer’s

bank requesting that a wire be sent from their account.

Compromised Email Accounts

Customer’s email account is hacked An email is sent to the customer’s

bank requesting that a wire be sent from their account.

The banker prepares and sends the wire per instructions

Compromised Email Accounts

Customer’s email account is hacked An email is sent to the customer’s

bank requesting that a wire be sent from their account.

The banker prepares and sends the wire per instructions

The customer notices an unauthorized transaction and notifies the bank

Compromised Email Accounts Customer’s email account is hacked An email is sent to the customer’s

bank requesting that a wire be sent from their account.

The banker prepares and sends the wire per instructions

The customer notices an unauthorized transaction and notifies the bank

A wire recall is attempted by the bank

Auditor Scams

Auditor Scams

Customer is contacted by an individual purporting to be a bank auditor

Auditor Scams

Customer is contacted by an individual purporting to be a bank auditor

Customer is asked to withdraw cash in order to “test” the honesty of a teller

Auditor Scams

Customer is contacted by an individual purporting to be a bank auditor

Customer is asked to withdraw cash in order to “test” the honesty of a teller

Customer meets the “bank auditor” in a parking lot to hand over the cash

Auditor Scams

Customer is contacted by an individual purporting to be a bank auditor

Customer is asked to withdraw cash in order to “test” the honesty of a teller

Customer meets the “bank auditor” in a parking lot to hand over the cash

A meeting time is scheduled for the “auditor” to return the cash to the customer

Auditor Scams

Customer is contacted by an individual purporting to be a bank auditorCustomer is asked to withdraw cash in order to “test” the honesty of a tellerCustomer meets the “bank auditor” in a parking lot to hand over the cashA meeting time is scheduled for the “auditor” to return the cash to the customerThe “auditor” doesn’t show up

Employment Scams

Employment Scams

•Customer of the Bank is out of work or looking to

supplement their income.

Employment Scams

•Customer of the Bank is out of work or looking to supplement their income•Post their resume online

Employment Scams

•Customer of the Bank is out of work or looking to supplement their income•Post their resume online •Obtain an offer for employment w/o ever meeting their “boss” face to face

Employment Scams

•Customer of the Bank is out of work or looking to supplement their income•Post their resume online •Obtain an offer for employment w/o ever meeting their “boss” face to face•Provide their account number to their employer

Employment Scams•Customer of the Bank is out of work or looking to supplement their income•Post their resume online •Obtain an offer for employment w/o ever meeting their “boss” face to face•Provide their account number to their employer•Deposits are made to the account and the new employee only has to w/d and wire the funds

Employment Scams•Customer of the Bank is out of work or looking to supplement their income•Post their resume online •Obtain an offer for employment w/o ever meeting their “boss” face to face•Provide their account number to their employer•Deposits are made to the account and the new employee only has to w/d and wire the funds•There is always a victim on the other end of the transaction

Grandma Scam

Grandma Scam

It starts with a phone call -- someone posing as your child or grandchild dials you up to beg for money to deal with an emergency, often cast as a dire threat to the loved one you think you’re talking to.

Grandma Scam

It starts with a phone call -- someone posing as your child or grandchild dials you up to beg for money to deal with an emergency, often cast as a dire threat to the loved one you think you’re talking to.

It’s known in law enforcement circles as the “Grandma Scam” and it’s so familiar that no one should be falling for it any more. But state authorities tell us it’s costing seniors their retirement money, good health and peace

of mind.

Identity Theft

Identity Theft

What type of information do crooks want??– Name– Address– Telephone number– Driver’s License number– Social Security number– Employment ID card or number– Mother’s maiden name– PIN numbers

Identity Theft

How do perpetrators get your information?– First hand knowledge (relative or acquaintance)– Insiders (applications, employee records, etc.)– Theft of purse or wallet– Mail theft– Burglary or break-in– Computer hacking– Theft of trash

Identity Theft

How do perpetrators get your information?– First hand knowledge (relative or acquaintance)– Insiders (applications, employee records, etc.)– Theft of purse or wallet– Mail theft– Burglary or break-in– Computer hacking– Theft of trash

Which of the above can you control?

Identity theft

***Mail Theft***

Don’t put your outgoing mail out with the flag up

Collect your incoming mail ASAP

Use a PO Box when possible– For sensitive mail including bank statements – Don’t give the PO Box # out to just anyone

Identity Theft

How Is Your Stolen Information Most commonly Used?

Create counterfeit checks– If your account number is used

The bank is liable if you report the matter within 30 days of receiving your bank statement

– If your name is usedYou must file an affidavit for each check with each merchant

Identity Theft

– Online purchases (internet)If your credit or debit card number is used, you must file a dispute within 60 days of the transaction

– The bank can return the loss to the merchant if your physical card was not present at the time of purchase

Identity Theft

– Perpetrator may use various means to steal your identity

Usual means of credit cards, bank accounts, etc.

Much worse is when they really become you!!!**

Identity Theft

How Can We Protect Ourselves?

Don’t give out your SSN unless necessary– Does your doctor need your SSN???

Don’t carry your SSN card, birth certificate or passport in your wallet or purse

Shred unwanted documents including credit offers

Put only your name and address on your checks– Welcome the merchants to request your ID

Identity Theft

How Can We Protect Ourselves?

Don’t write down your passwords or PIN’s

Photo copy everything in your wallet or purse to make canceling easier (lock it up)

Review your credit report every year *

Reconcile all bank statements immediately

Alerts/Brochures

Comments or Questions???