Did you hear white-collar crime? Well, this term is used for banking fraud. Bank fraud is considered a crime and in many countries, there are strict rules and regulation and fraudsters are sentenced to lifetime jail f if they get exposed before fleeing to another country. Bank in any location on earth is financial institutions that pay loans to its customers; have saving accounts of people and what fraudsters do with banks? They take money from the bank in terms of loans. Any kind of fraud is illegal and all the ways used for obtaining money from banks are illegal activities. Here in this post, twenty types of banking fraud are mentioned. Give this post a read and make yourself aware of the tricks and fraud that are happening in the banks everywhere around the word. Some types will leave you in shock. Be careful while dealing with your bank account and payments.
1- Money Laundering
Money laundering is the most popular bank fraud. It has its traces of Al Capone who was a businessman and gangster. This term is defined as a huge amount of money acquired through illegal sources such as smuggling or human trafficking and presented as clean money.
2- Duplication or Skimming of the Card Information
This type of fraud has various forms. A small device attached in public ATM machines that act as a reader and take the card information which then later used by fraudsters to make a replicate of the original card.
3- Payment Card Fraud
This is a widespread crime all over the world in which credit cards or debit cards are used in buying stuff over the internet or while paying through payment cards.
4- Accounting Fraud
This fraud is common in terms of business purposes and many executives of the companies have done this before and doing it till so far. In this, the real loss or debt of the company is hidden with fake market values to gain loans from the bank.
5- Wire Transfer Fraud
This fraud involves the international money transfer issue. Although the process is used for a fast money transfer. The fact is fraudsters take advantage of this because the global money transfer once made is irreversible.
6- Empty ATM Envelope Deposits
The evolution of technology by which money is deposited through ATM represents this type of fraud. The owner of the account is making false deposits at the ATM machine just to gain more cash than the actual amount present in the account.
7- Identity Theft or Impersonation
This is a huge problem for people who get convinced with scammers and give account information. The scammers steal customer’s information and then apply for another bank account on the name of the victim.
8- Bill Discounting Fraud
The fraudsters use tricks over the bank and gain bank trust through a company, false customers and make huge money from the bank in terms of the bill presented by the bank to the company.
9- The Fictitious Bank Inspector
This fraud has become more common in the banking system where a person claims of being a bank inspector and comes up with the allegation that the employee of the bank has stolen money.
10- Phishing or Internet Fraud
This fraud has been used in the largest bank fraud events. In this, the email system of the bank is used to obtain information from the customers so that money can be withdrawn from the victim’s account.
11- Stolen Checks
This involves an approach to post offices and mailrooms. The fraudsters gain access to blank checkbooks and made duplicate signatures so they can have access to unauthorized funds.
12- Demand Draft Fraud
This involves insiders of the bank. Yes, the employees of the bank use this kind of fraud to withdraw money from the account without actually being caught.
13- Cheque Kiting
In this fraud, the cheques play an important role and the fraudsters claim money which actually doesn’t exist. That’s the trick! Two branches of the bank are used for this fraud.
14- Stolen Payment Cards
This type of fraud involves stealing the information on credit cards for online banking fraud. This can be done without actually stealing the payment card.
15- Fraudulent Loans
The well-known fraud in banking history, a huge amount is withdrawn from the bank on the name of the loan and will be returned to the bank with interest. This also includes mortgage fraud.
16- Prime Bank Fraud This kind of fraud involves fraudulent schemes naming prime bank investment. The customers are given the opportunity to invest in the scheme.
17- Fraudulent Loan Applications
This fraud involves hiding the actual history of credit cards, loans, and financial problems. In this accounting, fraud is used to con bank for investment.
18- Forged or Fraudulent Documents
This involves the game of documents in which documents are presented as this amount is taken as a loan, this sum of money has withdrawn by the customer.
19- Remotely Created Check Fraud
This type of fraud is done because of the nonexistence of the authorized signature. The remotely created checks are issued by credit card companies with a statement authorized by the drawer.
20- Rogue Traders
This involves the traders of companies or financial institutions who use the money for unauthorized trades and any loss in trades results in a bank collapse.
Bank fraud can be already planned and sometimes its bank that is culprit such as CEO of the bank. The most frequent fraud you can observe everywhere is online banking fraud. Visa card, Master Card, and credit card will always top for scammers. The people involved in bank fraud are fraudsters and there is a long list of fraudsters. Surprisingly, the fraudster can be traced back to previous centuries too, that shows the bank fraud is not new!
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