#9. Bank examiners and “government” scams

Scam artists prey on the victim’s respect of “official” institutions to steal money. This is done through impersonating bank examiners, credit card companies, and government agencies.

Edna received a call from a person claiming to be representative from her bank. The caller claimed that a certain amount of money was missing from her bank account and that verification was needed of the loss. The caller went on to explain that they suspected one of the bank’s employees was taking the money. “Would Edna like to assist the bank in catching the crook?” Of course Edna agreed to help the person on the phone. The caller said that an official from the bank would come to her home to examine her bank book and verify the balance. Shortly thereafter a nice looking young man in a uniform appeared her door he showed her identification that indicated he was from the bank. He asked to see her bank book. After making some calculations he asked her if she could come to the bank with him and withdraw some money to verify the bank balances. Edna went with the nice young man to the bank. She withdrew a large sum of cash at his instruction. He gave her a written receipt for the cash and said he would contact her the next day. Three days later when she still had not heard from the bank, she called the police and found out she was a victim of the bank examiners scam.

Elements of the bank examiners scam

• A person calls or visits your home claiming to be representative of your bank or credit union.
• Commonly, the person represents that the bank is experiencing some trouble with your account, either a dishonest employee, computer problems, or something else requiring your attention.
• Your asked to help catch the crook, verify the bank balance, or do something else, but the solution always requires you to withdraw money from your account.
• A supposed bank representative, sometimes in uniform, comes to verify the amount withdrawn from your bank. This person will often give you an official looking receipt for your money.

With the bank examiners scam, sometimes three or more people are involved. However, the common theme is that something is wrong with the bank account and the victim needs to withdraw cash to help solve the problem. The scam artist relies upon the victim’s sense of civic duty and honesty. The acting can be extremely persuasive. The bank examiner scam relies entirely upon the victim’s ignorance of correct banking procedures. It is important to realize that you will never be contacted by the bank and asked to verify your account balance. In the unlikely event that a legitimate bank had problems with a dishonest employee, computers, or the accounting system, the bank certainly would not want to tell its customers or involve them in the scandal. The bank would be much more likely to call a law-enforcement agency or an accounting firm. Law-enforcement agencies are perfectly able to provide decoys without involving bank customers. Bank examiners do exist but they work for large accounting firms, state agencies, or the federal government. They also work directly with bank officials, not customers. An ordinary bank customer would probably never come in contact with a bank examiner.

If you receive a call concerning your bank account, request that the information be provided to you in writing. If the caller insists that the matter must be cleared up immediately, request the name of the caller’s supervisor. Then hang up and call the bank back after verifying the bank’s number from the telephone book or your statement. Ask for the name of the person you were told was the supervisor. It is important to look up and independently verify the telephone number of the bank because if you call the number given you by the scam artist there is nothing to prevent them from pretending that you are calling the bank. If you have a question about the bank’s contact either go directly to the bank and talk to the manager or ask a friend or relative to go for you. Never withdraw money from your bank account at the request of a stranger.

As in many other scams, scam artist will attempt to get the victim involved without giving the person time to think things over. They realize that the more time the victim has, the less likely they will cooperate. The scam artist may appear very upset, offended, or even angry at the suggestion that you should verify his or her credentials. They will often have the same reaction to the suggestion that you call a friend or other adviser.

Sometimes, the scam artists will impersonate government agencies (real or fictitious) and attempt to steal money from unsuspecting victims. In one kind of scam, a caller contacts a scam victim and pretends to be from the “state scam enforcement agency.”

Ruth lost $2,500 in a business opportunity scam. A few weeks later, she received a call from a woman who identified herself as working for the state scam enforcement agency. The woman explained that her agency assisted scam victims in recovering their lost money. Ruth was immediately very interested. “How did you get my name?” asked Ruth. The woman explained that her agency recently shut down a local scamming operation and recovered the list of victims. They were in the process of contacting the victims to assist them in recovering their lost funds. Ruth was still very upset about losing the money. “What are the chances that you can get my money back?” she asked.

The women explained the program in detail. Ruth asked a number of questions but the woman had answers for all of them. Finally, the woman asked Ruth to verify her credit card number. The woman read the number and asked if that was correct. Ruth was very surprised to hear her own credit card number. The woman mentioned that there was a nominal processing fee and would be all right to charge a fee to her credit card. Ruth agreed and the conversation soon ended. When Ruth received her credit card bill she realized she had been victimized again.

The recovery of money in these types of scams is contingent on the payment of some type of registration or processing fee. Sometimes the representative will encourage you to pay a larger fee to “expedite” the recovery. Payment for the service is requested immediately by credit card or a courier is sent to pick up a check. It is important to realize that scam artists commonly sell the lists of their victims to other scam artists and these lists often contain considerable personal information, such as credit card numbers and other financial information. The scam artists use a variety of misrepresentations to add credibility to their solicitation. You may be told that you will be placed at the top of the list for reimbursement from the previous scam. The scam artists may also charge large fees to provide information that could be obtained free of charge from nonprofit consumer protection agencies and government agencies.

Under the federal Telemarketing Sales Rule it is illegal for recovery room operators to receive payment until seven business days after you receive the recovered money or other lost item. National, state and local consumer advocacy agencies and legitimate nonprofit consumer assistance organizations do not charge for their services. It is also very unlikely that a legitimate assistance organization will call fraud victims directly.

You should follow many of the same steps to protect yourself as you would with the bank examiners scam. Individuals who claim to represent these organizations should be investigated. The easiest way to do this is to request the exact name of their organization and then look up the organization in the telephone book where government agencies are listed. Call the government agency or organization and ask them to send information about their operations and verify that the individual who called you actually works for the organization. The chances are that you will be unable to find the name of the organization in the telephone book.

Protect yourself by:

• Never giving bank account information to someone over the phone.
• Realizing that the banks do not to enlist their customers in attempting to catch crooks or solve accounting problems.
• Never withdrawing cash from your bank account or an ATM at the request of a stranger.
• Calling the bank directly to verify any contact or verifying the employment of any individual who claims to represent a nonprofit organization or government agency. You can also investigate the bank or company by calling the local consumer protection agency (usually affiliated with the state Attorney General’s office).
• Never allowing strangers to come into your home while you are alone.
• Being skeptical of people who offer to recover money, merchandise, or prizes for an advance fee.
• Obtaining a detailed description in writing of the specific services offered by recovery organization and any charges.