Mobile Deposit Scams Explained

In these types of scams, bad actors will convince their victims to deposit a check into their account using remote deposit, only to later ask them to send those funds back to the scammer in full or partial amounts. Once the victim sends the funds back to their attacker, the original check deposited will be identified as fraudulent, the check will bounce, and the poor victim will be left footing the bill. These scams can happen to individuals and businesses alike, so everyone needs to be aware of the risks.

How it Works

Mobile deposit scammers are taking advantage of the time difference between when their fraudulent money gets deposited in the victim’s account and the bank realizes that the funds aren’t real. With remote deposit capture, especially in mobile banking, these lags in processing create just enough of a window for the scammer to get their victims to send funds back to them, then disappear before the victim realizes what has happened.

There are a few types of common mobile deposit scams, but essentially, they all work in a similar fashion:

1. The scammer contacts their victim via social media, text, or another online platform.
2. With a very convincing story, the scammer sends money to their victim and tells them to deposit it in their bank account.
3. After the funds are deposited, the scammer asks the victim to return the funds entirely or send a portion of the funds back due to overpayment.
4. Once the victim complies, the fraudster goes away and the bank realizes that the original check deposited was fake, resulting in the victim being on the hook for the cash they sent back to the scammer in step #3.

Key Types: Dating Scams, Lending Scams, Employment Scams

The most common types of mobile deposit scams are dating scams, lending scams, and employment scams. By understanding these main tactics, such as the use of a fake check to manipulate victims into returning funds before the check bounces, you’ll be able to protect yourself from mobile deposit scammers.

Dating Scams

According to the Federal Trade Commission (FTC), dating and romance scams resulted in consumers losing more than $1.14 billion in 2023 alone. The average loss in a single scam of this nature is about $2,000, making it the highest-loss imposter scam out there. These types of scams play on people’s emotions, making them extra damaging.

Under the umbrella of mobile deposit scams, dating scams take place when fraudsters get on dating sites or applications, pretend to initiate romantic relationships with other app users, then convince those users to give them access to their bank account, send them money, or set up a new bank account to help facilitate the movement of funds between different accounts.

Lending Scams

Taking advantage of vulnerable people or businesses that need extra funds, lending scams are running rampant. In these schemes, cybercriminals pose as lenders from financial institutions and “approve” their victims for loans. After the approval, scammers get the applicant to submit their personal details, including banking information, for direct deposits.

From there, they will send a fake loan, and then ask the victim to transfer the money back to them for some reason. If the funds were fraudulent in the first place, the money sent from the victim’s account will negatively impact their account totals.

Employment Scams

Especially with the rise of remote work, mobile deposit employment scams are becoming more common. In these scams, the bad actors will post fraudulent job listings for very vague positions, often promising a “too good to be true” compensation package. When someone applies for the position, that’s just the beginning.

After the victim is “hired,” the fraudster will send funds for work equipment or other job-related reasons, and then ask the victim to return the funds for varying reasons. Once the funds are returned, the original check will bounce, and again, the victim will be on the hook. Scammers exploit victims by gaining access to their accounts online, making it crucial to verify any inquiries and remain vigilant against potential scams.

Protecting Yourself: How to Prevent Mobile Deposit Scams

Once you know how mobile deposit scams work, you’re more equipped than most to prevent mobile deposit scams. But there are a few things you can do to keep your defenses up in the years to come:

Verify the Request

In the same way that you’d double-check the email address before clicking a link in the email, do some research before sending or accepting funds. If you’re transacting with a business, can you look up the business’s information with ease? Do they have an online presence? With individuals, check out social media and LinkedIn – can you find the person, or do they seem to be posing as someone else? Additionally, use mobile banking apps to verify the legitimacy of requests, as these apps often provide secure features for transactions and can help you avoid potential risks.

Monitor Accounts

By keeping a close eye on your bank account activity, you can alert your institution in the event of anything suspicious. If you’re getting funds deposited into your account that you didn’t expect, contact your bank right away to protect yourself from potential remote deposit scams.

Secure Your Info

Don’t give out your account information to individuals or businesses that you haven’t yet vetted, especially when using mobile deposits. If someone you’ve never met is trying to get details like your account number, routing number, or home address, you should be on high alert.

Red Flags for Mobile Deposit Scams

Mobile deposit scams can be difficult to detect, but there are several red flags that can indicate a potential scam. Here are some common red flags to watch out for:

• Unsolicited Job Offers: Be wary of job opportunities that come out of the blue, especially if they require you to deposit a check and send money back to the employer. Legitimate employers will never ask you to handle funds in this manner.
• Requests for Personal and Account Information: Scammers often ask for sensitive details like your bank account number or online banking login credentials. Never share this information with anyone you haven’t thoroughly vetted.
• Fake Checks: Checks with incorrect or missing information, such as misspelled names or addresses, are a major red flag. Always verify the authenticity of a check before depositing it.
• Requests to Send Money Back: If someone asks you to deposit a check and then send money back to them via wire transfer or gift cards, it’s likely a scam. This is a common tactic used in deposit scams.
• Unsolicited Emails or Messages: Be cautious of emails or messages with attachments or links that ask you to download software or provide personal information. These could be phishing attempts designed to steal your data.
• Job Postings with Fees: Legitimate job postings will never require you to pay a fee or provide financial information upfront. If a job listing asks for this, it’s a red flag.

If you encounter any of these red flags, it’s essential to be cautious and not proceed with the transaction.

Act Fast: What To Do if You Fall Victim

If you do fall victim to a mobile deposit scam, contact your bank and the local authorities as soon as possible. They may be able to freeze the funds or delay the payment you sent. Even in the case where it’s too late to prevent the scam altogether, the faster you alert the authorities, the more likely it is that you’ll have a positive outcome.

Reporting Mobile Deposit Scams to the Authorities

If you suspect that you’ve been a victim of a mobile deposit scam, it’s crucial to report it to the authorities immediately. Here are the steps to take:

• Contact Your Local Police Department Immediately: Report the incident to your local police department. They can help you document the scam and may be able to assist in the investigation.
• Notify Your Financial Institution: Inform your bank or credit union about the scam. Ask them to place additional safeguards on your account to prevent further unauthorized transactions.
• File a Complaint with the FTC: The Federal Trade Commission (FTC) tracks and investigates scams. You can file a complaint online or by calling 1-877-FTC-HELP (1-877-382-4357).
• Report to the IC3: The Internet Crime Complaint Center (IC3) is another resource for reporting online scams. Submitting a report can help authorities track and combat these crimes.
• Keep Records: Maintain a record of all correspondence and transactions related to the scam. This documentation can be valuable for law enforcement and your financial institution.

Reporting the scam to the authorities can help prevent others from falling victim to the same scam and can also assist in the investigation and prosecution of the scammers.

Staying Safe with Mobile Deposit Technology

Mobile deposit technology can be a convenient and secure way to deposit checks, but it requires caution and awareness to avoid scams. Here are some tips to stay safe with mobile deposit technology:

• Use a Secure Mobile Banking App: Ensure that your mobile banking app has robust security features, such as encryption and two-factor authentication. These features add an extra layer of protection to your online banking accounts.
• Keep Your Mobile Device Updated: Regularly update your mobile device and operating system with the latest security patches. This helps protect against vulnerabilities that scammers might exploit.
• Use a Password Manager: A password manager can generate and store unique and complex passwords for your accounts. This reduces the risk of your passwords being compromised.
• Avoid Public Wi-Fi: Public Wi-Fi networks can be insecure. Avoid using them to access your online banking accounts. Instead, use a secure, private connection.
• Monitor Your Account Activity: Regularly review your bank account activity and report any suspicious transactions to your financial institution immediately. Early detection can help prevent further unauthorized activity.

By following these tips, you can stay safe with mobile deposit technology and enjoy the convenience and security it offers.