Bank fraud — the unauthorized access to your accounts or theft of your money — takes several distinct forms, each with different warning signs and different protective measures. Older adults are disproportionately targeted by many types of financial fraud, and the tactics evolve constantly. The good news is that the most effective protections are straightforward: monitoring your accounts regularly, understanding what legitimate banks never do, and knowing what steps to take immediately when something looks wrong.
Common Types of Bank Fraud
Most bank fraud falls into a handful of categories. Knowing what each looks like makes it easier to recognize when something is wrong before significant damage is done.
Account Takeover
Account takeover occurs when a fraudster gains access to your online banking credentials and takes control of your account — transferring money, changing contact information, or opening new accounts in your name. The most common entry points are phishing emails or texts that direct you to a fake login page, data breaches that expose username and password combinations used on other sites, and social engineering calls where someone impersonates your bank and asks for your login credentials or one-time passcode. Banks will never call, email, or text asking for your online banking password, full Social Security number, or a verification code sent to your phone — these requests are fraud, regardless of how legitimate the caller sounds.
Phishing and Smishing
Phishing uses email; smishing uses text messages. Both attempt to trick you into clicking a link that leads to a fake website designed to look like your bank, where you enter your credentials. The messages often create urgency: “Your account has been suspended,” “Unusual activity detected,” “Verify your information immediately.” Legitimate banks do send fraud alerts by text or email, which is why this works — the format is familiar. The safest habit: never click a link in a banking email or text. Instead, open a fresh browser tab and navigate to your bank’s website directly, or call the number on the back of your debit card.
Check Fraud and Overpayment Scams
Check fraud includes forged checks written on your account and scams where you receive a fraudulent check and are asked to send back a portion. The overpayment scam is a classic: a buyer pays you for something with a check for more than the agreed amount and asks you to refund the difference. You deposit the check, it appears to clear in a day or two, you send the refund — and a week later the check bounces and your bank holds you responsible for the full amount. Banks are required to make funds available quickly, but that does not mean the check has actually cleared the issuing bank. Funds from checks can be clawed back for weeks.
Elder Financial Fraud: A Specific and Growing Threat
Financial fraud targeting older adults is one of the fastest-growing categories of crime in the United States, costing victims an estimated $3 billion or more annually. Older adults are targeted for several reasons: they are more likely to answer unknown phone calls, more likely to have significant savings, more likely to be socially isolated, and sometimes more trusting of authority figures. Awareness of the specific tactics used makes it much easier to recognize and resist them.
Government Impersonation Scams
Scammers impersonate the IRS, Social Security Administration, Medicare, or law enforcement to create fear and urgency. Common scenarios: “Your Social Security number has been compromised and your benefits will be suspended unless you verify your information.” “You owe back taxes and will be arrested unless you pay immediately.” Legitimate government agencies do not demand immediate payment over the phone, do not ask for payment via gift cards or wire transfer, and do not threaten immediate arrest. If you receive a call like this, hang up and call the agency directly using a number from their official website.
Romance and Grandparent Scams
Romance scams involve a fraudster building an online relationship over weeks or months, then requesting money for a crisis — medical emergency, travel to visit you, investment opportunity. Grandparent scams involve a call from someone pretending to be a grandchild in trouble (“Grandma, I’ve been arrested, don’t tell Mom”) or a lawyer or official helping them. The request for secrecy and urgency are hallmarks of both scams. The solution: always verify directly with the family member through a known phone number, never send money based solely on a call or message without independent verification.
Investment and Crypto Fraud
High-return investment schemes targeting older adults include fake certificates of deposit with unusually high rates, annuity products with hidden fees and surrender charges, Ponzi schemes promoted through religious or community networks, and increasingly, cryptocurrency investment scams where a new “friend” offers to teach you to invest in crypto and guides you through a fake platform designed to show impressive gains until you try to withdraw. A consistent warning sign across all investment fraud: pressure to act quickly, guaranteed returns, requests to keep the investment secret, or requests to move money outside your normal accounts to fund the investment.
How to Protect Your Accounts and What to Do If You’re a Victim
Most bank fraud is preventable with a small number of consistent habits. When fraud does occur, speed matters — the faster you report it, the better your chances of recovering funds.
Account Monitoring and Alerts
Set up text or email alerts for every transaction on your checking and savings accounts. Most banks allow you to set a threshold — for example, alert me on any transaction over $50 — which catches unauthorized activity quickly without overwhelming you with notifications for small purchases. Review your statements at least monthly, even if you have alerts set up. Check your credit report at AnnualCreditReport.com annually (all three bureaus) to look for accounts you did not open. Consider placing a credit freeze at all three bureaus — it is free, does not affect your existing accounts, and prevents new credit from being opened in your name without your explicit permission.
Strong Authentication Practices
Use a unique, strong password for your online banking — do not reuse passwords across sites. Enable two-factor authentication (2FA) on your banking apps, but prefer an authenticator app (like Google Authenticator or Authy) over SMS-based 2FA when the option is available, as SMS codes can be intercepted through SIM swapping. Never share your password, PIN, or one-time passcode with anyone, including people who claim to be from your bank. Your bank already knows your information — it will never need you to repeat it back in a call you did not initiate.
If You Suspect Fraud: Immediate Steps
Call your bank immediately using the number on the back of your debit card — not a number provided by whoever contacted you. Ask to speak with the fraud department and report the suspicious activity. The bank will freeze the affected account and issue new card numbers. For unauthorized electronic transfers, the Electronic Fund Transfer Act (EFTA) gives you the right to dispute them — your liability is limited to $50 if reported within two business days, $500 if reported within 60 days. Report scams to the FTC at ReportFraud.ftc.gov and to your state attorney general’s office. If you have sent money via wire transfer or gift card, contact the sending institution immediately — wire recalls are possible if done within hours; gift card refunds are rare but worth attempting.
Who This Page Is For
- Anyone who manages their finances online and wants to understand the most common threats and how to counter them
- Older adults who are aware they are frequently targeted by scammers and want a clear picture of what to watch for
- Adult children helping an aging parent manage finances who want to understand what protections are in place and what to add
- Anyone who has received a suspicious call or message and wants to know how to evaluate whether it is legitimate
- People who have already experienced a scam and want to understand what recovery steps are available
What to Do Next
- Set up transaction alerts on your checking and savings accounts — most banks offer this through their mobile app or online settings at no cost
- Place a credit freeze at Equifax, Experian, and TransUnion if you are not actively applying for credit — it is free and prevents new accounts from being opened in your name
- Enable two-factor authentication on your banking apps if you have not already, and choose an authenticator app over SMS if the option is available
- Save the fraud department phone number from your bank in your phone so you can call it immediately if something looks wrong — use the number from the back of your debit card, not a number found in a search engine
- Talk with older family members about government impersonation and grandparent scams — these conversations are most effective before a scam attempt, not after
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