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US banks bid to crack down on 'card cracking'

18 May 2015  |  8473 views  |  2 Check close up

US banks and law enforcement agencies are calling on consumers to be alert to an emerging scam, dubbed 'card cracking, which has so far cost the industry $11.6 million in stolen funds.

Card cracking is a form of fraud where consumers respond to an online solicitation for 'easy money' and provide a debit card for withdrawal of fake cheque deposits.

Criminals use social media platforms like Facebook, Twitter, or Instagram to solicit consumers, often targeting people between the ages of 19 and 25 years-old, as well as college students, newly enlisted military and single parents.

People who respond are asked to provide a debit card, PIN and online credentials to give the criminal direct access to their account. The fraudster deposits worthless cheques using mobile deposit and immediately withdraws the funds at an ATM.

The customer then calls to report a stolen card or compromised credentials. The bank reimburses the customer for funds lost and the criminal provides the customer with a cut of the money withdrawn using the bogus chequess.

According to a 2014 ABA survey, bank respondents reported $11.6 million in stolen funds as a result of card cracking.

Since the emergence of the scam, the ABA says banks have developed an increasingly sophisticated system for detection and warns customers and fraudsters of a variety of consequences, including the loss of an account, the loss of money, damaged credit and possible jail time.

Comments: (2)

A Finextra member
A Finextra member | 18 May, 2015, 17:34 If the customer is giving up all this personal information why is this costing the industry anything. Is the customer not liable?
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A Finextra member
A Finextra member | 19 May, 2015, 08:18

I do agree with Steve (above). Ultimate responsibility of safegurading banking assets (Debit Card, PIN, TIN i-PIN) rests with the consumer. These hould not be disclosed to a third party at any cost. No responsible Bank/Banker will ask a customer to part with these sensitive details. Unless there is a subtle sinister motive behind such request. On a different note, as long as greed for easy money is an inherent part of human nature, scamsters and fraudsters will have a field day !!! 

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