What Is Bank Fraud? Common Types and How to Protect Yourself

Bank fraud is one of the fastest-growing financial crimes in the world. Every year, millions of people lose money to scams, account takeovers, fake checks, and identity theft. But what exactly is bank fraud? And more importantly, how can you protect yourself from it? This guide will break down:

• What bank fraud is and how it works
• The most common types of bank fraud (from phishing to account takeovers)
• How to spot fraud before it’s too late
• What to do if you become a victim

Let’s make sure your money stays safe.

What Is Bank Fraud?

Bank fraud is any illegal activity that deceives a bank, financial institution, or its customers in order to steal money or sensitive information. Fraudsters use tricks, technology, and social engineering to gain access to accounts, manipulate financial transactions, or trick people into handing over their money. Bank fraud can happen to anyone—from individuals and small businesses to large corporations. Some scams involve hacking and identity theft, while others rely on good old-fashioned deception.

Worth noting: If someone is lying, faking, or manipulating financial systems to steal money, it’s bank fraud.

The Most Common Types of Bank Fraud

Fraud comes in many forms, but some scams are more common than others. Here’s what you need to watch out for:

Phishing Scams (Fake Emails, Texts and Calls)

Phishing is when scammers pretend to be your bank to steal your personal information.

How the Scam Works

• You receive an email, text, or call claiming to be from your bank.
• The message says your account is locked or there’s suspicious activity.
• It asks you to click a link or provide your login details.
• If you enter your info, the scammer steals your credentials and drains your account.

How to Spot It
The email or text has urgent language like “Immediate action required!”
The link looks weird (e.g., “bank-security-alert.com” instead of your real bank).
The message asks for sensitive info like your password or Social Security number.

How to Avoid It

• Never click on links in emails or texts claiming to be from your bank.
• Call your bank directly using the number on the back of your card.
• Enable two-factor authentication (2FA) to protect your account.

Check Fraud (Fake and Altered Checks)

Check fraud has been around for decades, but criminals still use it to steal thousands from unsuspecting victims.

How the Scam Works

• Someone gives you a fake or altered check and asks you to deposit it.
• The check initially clears, so you think it’s legit.
• The scammer asks you to send them money before the check bounces.
• A few days later, your bank realizes it was fake and takes the money back—leaving you on the hook.

How to Spot It
Someone you don’t know well sends you a check out of nowhere.
The check looks off (strange fonts, missing security features).
The sender pressures you to send money back quickly.

How to Avoid It

• Only accept checks from trusted sources.
• Wait for a check to fully clear before withdrawing funds.
• Be wary of overpayment scams where someone “accidentally” pays too much.

Account Takeover Fraud (When Hackers Hijack Your Bank Account)

Hackers love targeting bank accounts, and weak passwords or data breaches make it easy.

How the Scam Works

• Scammers steal your banking credentials (via phishing, malware, or a data breach).
• They log in to your account and transfer money to themselves.
• Some scammers change your contact details, so you don’t get alerts.

How to Spot It
You suddenly can’t log in to your account.
Your bank sends you an unexpected alert about changes to your account.
Transactions appear that you don’t recognize.

How to Avoid It

• Use strong, unique passwords for your bank accounts.
• Enable two-factor authentication (2FA) so hackers can’t log in.
• Check your account regularly for suspicious transactions.

Wire Transfer and Zelle Scams

Scammers love convincing people to send money via wire transfer or Zelle—because once it’s sent, it’s nearly impossible to get back.

How the Scam Works

• Someone pretends to be a seller, landlord, or even a bank employee.
• They ask you to send money via wire transfer or Zelle.
• Once you send it, they disappear—along with your cash.

How to Spot It
They pressure you to send money fast.
They refuse to accept safer payment methods (like credit cards).
You’re asked to wire money to a random person instead of a company.

How to Avoid It

• Never wire money to someone you don’t know personally.
• Avoid paying upfront for online purchases via Zelle or wire transfer.
• Confirm the recipient’s identity with your bank before transferring funds.

What to Do If You’re a Victim of Bank Fraud

If you suspect fraud, act immediately to minimize the damage.

1	Contact your bank ASAP	Report unauthorized transactions.
2	Freeze or change your passwords	Lock down your online banking.
3	File a fraud report	Contact the FTC (Federal Trade Commission) at www.reportfraud.ftc.gov.
4	Monitor your credit report	Use AnnualCreditReport.com to check for identity theft.

The faster you report fraud, the better your chances of recovering your money.

Stay One Step Ahead of Bank Fraud

Bank fraud is constantly evolving, but you can protect yourself by staying informed and recognizing the warning signs.

Best Ways to Stay Safe

• Never share your banking info via text, email, or phone.
• Use strong passwords and enable two-factor authentication.
• Only send money through secure, trackable payment methods.
• Report suspicious activity immediately.

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Citations

• Federal Trade Commission (FTC): How to Spot and Avoid Bank Scams
• FBI: Common Banking Fraud Schemes
• Consumer Financial Protection Bureau (CFPB): How to Report Bank Fraud