College students—and bankers—beware! A scam known as “card cracking” could produce unexpected debt and serious consequences, says the Better Business Bureau.
Bankers reported $11.6 million in stolen funds as a result of card cracking, according to a 2014 ABA survey.
Social media plays an integral role in this scam that could have life-long consequences. The scam shares some similarities with the long-running Nigerian fraud attempts.
Basics of card cracking
Here’s how it works: Someone contacts a student via Facebook, Twitter, or Instagram and sets up a deal. The person asks if they can use a debit account to deposit a check and promises the person half the money deposited.
Once the victim agrees, there’s often a deposit in the bank account—followed swiftly by a withdrawal. The victim expects that he or she is going to get a portion of that deposited item, but that never happens. When the deposit turns out to be a counterfeit check, it evaporates, and the victim is on the hook for any money withdrawn from the account.
Why frauds target students
College students are targeted because the perpetrators think they can be easily convinced that their only role is to allow use of their account and they will get to keep half of the money.
Most young adults don’t really understand how banking works and may look for a quick way to get some money, BBB says. Not only are victims depositing fake checks, they are giving scammers access to their bank accounts.
For individuals going to college from high school it is the first time they are on their own. They don’t have enough knowledge of the banking system and are also trying to fit in trying to make new friends.
The scam’s long-term effects—including years of credit problems—could haunt victims for years. Bad credit could potentially cost jobs after graduation, or a new car, and even housing.
Tips for bankers to pass on to student customers to protect themselves from this scam:
• Keep debit cards and debit card data secure.
• This includes ATM cards and campus IDs that often double as ATM cards along with PIN numbers.
• Use hard-to-guess PINs on all accounts.
• Don’t autofill passwords on mobile devices or computers.
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