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Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

Special 10th Anniversary Edition - Fall 2003

Common Cons... and How to Avoid Them

Identity Theft:
By trickery, by stealing information from mailboxes or trash, or by using publicly available information, a crook obtains personal information about you — for example, your Social Security number, date of birth and mother's maiden name. Doing so, the fraud artist may be able to obtain credit cards, take out loans, make counterfeit checks or cards and go on a spending spree in your name.

Check Fraud:
A criminal steals or finds a checkbook or collects enough information about a bank account to make a counterfeit check.

Advance-Fee Scams:
You receive an unsolicited and attractive offer for a product, service, business opportunity or similar deal, but you're told you must send money or divulge bank account numbers before you receive anything in return. Lo and behold, the promised goods or services never arrive or they come with significant flaws.

Credit/Debit/ATM Card Fraud:
With credit cards, a thief might use or counterfeit your card or obtain a new card in your name, perhaps by stealing a pre-approved card application from your mail and having the card sent to a different address. As for ATM cards and debit cards (which deduct for cash or payments transacted at teller machines or retail establishments), the perpetrator might steal an existing card, make a new one, or obtain your personal identification number (PIN) to authorize transactions.

Fraudulent Cashier's Checks:
Crooks know that consumers trust cashier's checks, money orders and other official checks so they are increasingly counterfeiting them for use in both long-distance (over the Internet) and face-to-face transactions. Some scams may involve a cashier's check for more than the amount due. You are instructed to wire the excess amount to the buyer's account. You comply... and later find out that the cashier's check is phony.

Automated Payment Fraud:
A crook posing as a legitimate business or charity gets the name of your bank and your checking account numbers, perhaps by tricking you into divulging the details over the phone or by sifting through your trash for old bank statements or checks. The thief then instructs your bank to debit (withdraw) a certain amount from your checking account.

Internet Fraud:
One approach involves a fraudulent Web site touting extremely attractive deals in hopes that consumers will provide a credit card number, bank account number, password or a check. A variation involves a copycat Web site that deliberately uses a name or Internet address similar to, but not the same as, that of a large, well-known company. Yet another scheme uses an e-mail appearing to be from a company that you already do business with and that asks you to "re-enter" your Social Security number, credit card or debit card number, or PIN.

What can you do to fight these and other frauds?
  • Never provide your Social Security number, bank card numbers, PINs, passwords and other personal information in response to an unsolicited phone call, fax, letter or e-mail, which could be fraudulent.
  • Do your research and get key details in writing before giving money or personal information to an unfamiliar entity or in response to an unsolicited offer. Also beware of "deals" requiring money up-front.
  • Safeguard your incoming and outgoing mail, which could include checks, credit card applications, bank statements, "loan checks" (mailed by financial institutions with offers to "write yourself a loan") and other items of value to a thief. Keep bank and credit card statements, tax returns, checks and other sensitive documents in a safe place at home. Thieves pick through garbage looking for documents they can use to commit fraud, so before tossing out these items, destroy them, preferably using a "crosscut" shredder that turns paper into confetti. Also limit the confidential information in your wallet in case it gets lost or stolen.
  • Review your credit card bills and bank statements as soon as they arrive and quickly report anything suspicious. Also, most experts say you should check your credit reports at least once a year to look for such things as credit cards, loans or leases that have been wrongfully taken out in your name. A new law intended to fight identity theft gives consumers access to free credit reports and includes other provisions that will make it easier to monitor your credit files for fraud (see "Your Credit Record").

Excerpted from " Fighting Financial Fraud: How to Shield Yourself from Swindles ," Spring 2003.


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Last Updated 12/12/2003 communications@fdic.gov