introduction to fraud

Fraud can happen to anyone! Fraud occurs when someone or something tries to deceive or trick a person for their gain or to deprive the victim of a legal right. There are many types of financial fraud, including fake check schemes, phony jobs and lenders, money miles, and online classified ads.


Fraudulent Payments (Fake Check Schemes)

The Federal Trade Commission (FTC) estimates consumers lost over $3.3 billion to fraud in 2020 alone.* People of all ages fall victim to these scams. Nearly $1.2 billion of losses reported last year were due to imposter scams, while online shopping accounted for about $246 million in reported losses from consumers.**

There are many variations of the fraudulent payment scam, but there’s a typical pattern. Someone gives you money (via an electronic payment, check, or money order) and then asks you to send cash in return. When it eventually becomes clear that their payment is fraudulent, you are responsible for the money you sent them. Examples of this scam include:

A company promises you easy money working at home. They ask you to help them by accepting a payment and sending them money (minus your pay) via an electronic payment or money order.

You advertised an item for sale and the buyer “accidentally” sends you more than the price. The buyer then asks you to deposit their payment and send them the extra amount.

A special someone you’ve met online promises to come to the U.S. to be with you. They ask you to send them money directly or to deposit their check or money order and send them the cash to cover their travel expenses.

*Federal Trade Commission (2021):


Phony Lender

You receive a notice that the lender who collects your mortgage payment has sold or transferred your service to another lender. The notice is fake and you start sending your mortgage payments to a phony lender.

Remember, in most cases, your current services must notify you in writing at least 15 days before any such transfer. A “goodbye letter” should include all of the contact information, new loan number, and start date for the new servicer.

Contact your original lender to confirm that the transfer of service is legitimate. Generally, you will also get a notice from the new servicer confirming the details of the transfer.


Criminals try to contact and defraud potential victims using various means. Once they contact potential victims, they use compelling language and scenarios to scam them. If you’re involved in a situation that matches one of the following descriptions, it could be a scam and you should contact your bank immediately:

  • DATING SCAMS – Someone you met through an online dating site or chat room asks you to send money for a variety of reasons including a need for urgent surgery or to make travel arrangements to meet in person.
  • INTERNET SCAMS – You receive a check for something you sold over the internet, but the amount of the check is more than the selling price. You are instructed to deposit the check, but send back the difference in cash. Other examples include you receiving a check from a business or individual different from the person buying your item or product, or you are instructed to transfer money, or receive a transfer of money, as soon as possible.
  • JOB SCAMS – You are paid or receive a commission to facilitate money transfers through your account or apply for a job that asks you to set up a new bank account.
  • LOTTERY OR SWEEPSTAKES SCAMS – You receive notice that you are the winner of a lottery that you did not enter, but must pay a small percentage for alleged taxes or other fees before you can receive the rest of your prize.

Elder Fraud

Older adults can be at increased risk of being taken advantage of by family, friends, or strangers.

Remember, if it sounds too good to be true, it probably is.


If you become a victim of fraud, there is no reason to be embarrassed.  There are many resources out there to help you get through the cleanup process.  


Visit these websites for information on how to protect yourself or a loved one financially.


Financial institutions have policies to help protect you from fraud. Here are some processes and procedures they use to protect you:

ID Cards: When you make a transaction at the teller window, the teller will typically ask you to provide two forms of identification.

Teller: The teller may ask you specific questions about yourself to confirm your identity — in other words, to make sure that “you” are really “you”!

ATM/Debit card reader: You may be asked to swipe your ATM or debit card and enter your PIN while you’re standing at the teller window.

Check to deposit: When you make a deposit, you may have to wait a period of time before you can withdraw the money. Check with your bank to confirm their policies and procedures.

Note: If you plan to move, update the United States Postal Service and give your bank your new address. They’ll send you a notice at your “old” address to confirm you really made this request — not a criminal trying to steal your mail and identity.