Tricksters are happy to snatch your cash
Beware phantoms, impersonators, wire acts
Chilling financial horror stories don’t stop at kissing $150 or more goodbye to get a nasty, motion-activated giant clown to sit on your porch and scare away the kids.
All sorts of zombies, phantoms and ghosts snatch our money throughout the year. Ever hear of a phantom bank account? One that you never opened but sticks you with plenty of fees?
After the 2017 Equifax hacking scandal, experts say consumers increasingly need to to be on the lookout for phantom bank accounts, mysterious credit cards and other gruesome things. And remember, scammers don’t walk around in gory masks.
1) Phantom bank accounts and zombie accounts can scare everyday savers
Think of a phantom as just that, a ghost that’s up to no good.
A phantom account is when someone, not you, opens a bank account in your name using your ID.
Ken Tumin, of DepositAccounts.com, said sometimes a criminal will open a checking account using your ID and then attempt to link to another one of your accounts to try to withdraw money.
Or there could be the “zombie account.” That’s when you think you’ve closed a bank account but it reopens in one way or another.
“It kind of comes back from the dead,” Tumin said.
Tumin said he had an account suddenly reopen about four years ago. He had closed both a safe deposit box and a checking account. But, at one point, the bank refunded a few dollars that had been used as a deposit for the box.
The bank put the money owed to Tumin back into the closed checking account. To do that, of course, the bank automatically reopened the account. The problem? There was no other money in the account, so fees began adding up.
Tumin caught the problem within two months or so, complained, and convinced the bank to refund the money and close the account for good.
One tip: Consumers can use a system called ChexSystems to try to catch phantom or zombie accounts that they might not realize are open. Consumers have a right to receive one free report each year. Go online to www.chexsystems.com. Or you can call 800-428-9623 to use a voice messaging system where you leave information including your Social Security number and driver’s license number.
The free annual report can show inquiries created by bank account applications. If you see something you did not initiate, it could be a sign of fraud.
The ChexSystems also lists a history of checks ordered for a checking account — so if you didn’t order a box of checks, well, you’d want to quickly find out what’s going on there.
The ChexSystems report is used by banks to help the bank decide whether to approve a consumer’s application to open an account.
Typically, Tumin said, he’s seen more zombie accounts than phantom accounts.
Wells Fargo Bank, of course, ran into deep trouble after it was learned that employees secretly opened up to 3.5 million unauthorized deposit accounts and credit card accounts for customers. Wells Fargo was slapped with a $185 million fine.
The fake accounts, which first started coming to light about a year ago, were opened by Wells Fargo employees in order to meet sales targets and incentives. In many cases, the employees transferred money from consumers’ authorized account without their consent, often racking up fees or other charges.
2) Creepy credit cards can pop up around any corner
It’s a shock to discover that someone has been using your Social Security Number to open credit cards and go on a shopping spree for big-ticket items.
Sometimes, you discover the fraudulent accounts when a credit card is mailed to your house (when thieves hope to steal it from your mailbox). Or maybe you get a notice in the mail that a new account has been opened.
Or, maybe, you suddenly noticed that your credit score went from stellar to rock bottom in a short time. And you have no idea why. Fortunately, more people are able to regularly track their credit scores through free services.
“People have more access to their credit scores through their bank,” said Nessa Feddis, senior vice president of consumer payments and protection for the American Bankers Association.
She suggests that consumers keep an eye on their statements, as well as watching for odd activity via online banking and mobile banking alerts.
Consumers can be particularly vulnerable when in the hospital, as health care data breaches remain a threat.
3) Not everyone wears a Halloween mask to rob you
Con artists are regularly trying to trick people into depositing fake checks — and then wiring extra cash back to them. Maybe someone offers to buy your used car. But they somehow offer to give you a $3,000 check when you’re selling the car for $2,000 and the buyer asks you to wire the $1,000 back.
One fake storyline: The buyer might try to explain he is out of the country, maybe in the military. So he’s planning to have someone in the U.S. send you the check. You can deposit the check, he says, keep what you’re owed, but then wire the rest of the money to him.
The Better Business Bureau notes that a check can bounce even after your bank allows you to withdraw cash from the deposit.
The con artist will try to tell you to wire the money quickly but that only means you’ll be on the hook when the fake check is discovered later.