Back-to-school scams are as hot as new backpacks and sneakers.
Makes sense. Parents and students are busy knocking items off the back-to-school list and everyone is stressed out and distracted during the last days of summer.
Scammers know it’s easy to catch you off guard with fake texts that can include the shocking news that someone placed an order for a big ticket item, say an iPhone, on your Amazon account or Apple account.
Or they might claim that your bank account has been compromised. Or your Visa card is now locked.
Think about it, you might have just ordered a new comforter and sheets for your dorm room from Amazon anyway. Or you’ve been pulling out a credit or debit card for books or other items. A text might not be a complete surprise. But we’re only seeing more signs that the scammers are hard at work impersonating big, trustworthy brand names.
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MSU Federal Credit Union — the second largest credit union in Michigan with nearly $6.9 billion in assets — is warning college students and other members that scammers are sending phony texts with alarming messages. The credit union began to see an uptick in early August.
In some cases, credit union members are receiving fake texts that might look fairly generic. They could appear to be from the credit union but the text might not actually include the name of any financial institution. Consumers may mistakenly assume the text is from their financial institution, according to Deidre Davis, chief marketing officer for MSUFCU.
The text might say something like: Call now, Visa card temporarily locked.
The knee jerk reaction — which con artists hope you’ll have — is to immediately call or click on a link to unfreeze an account or deal with a suspicious purchase.
A consumer could feel pressured to “log in” to a fake web site as part of the process set up by the scammers.
“Now they’re capturing everything they need to really scam the person out their money or to steal their identity,” Davis told the Free Press.
Robotext scams are on the rise
Robotext scams are heating up and could be passing robocalls as a tool for con artists, according to the Federal Communications Commission.
Consumer complaints to the FCC about unwanted text messages have risen steadily in recent years from 5,700 in 2019 to 15,300 in 2021. This year through June 30, the FCC said it had already received 8,500 complaints on robotexts.
“Texts may include false-but-believable claims about unpaid bills, package delivery snafus, bank account problems, or law enforcement actions against you,” the FCC warned.
The information on these texts might be confusing and crafted in a way to tempt someone to engage quickly.
Many people avoid answering a call these days from an unknown number. But ignore what looks like an urgent text? Well, we’re going to need learn to do that one, too.
Davis, at MSUFCU, said she’s received texts that appear to be from banks, such as Chase, where she doesn’t have accounts. She’s even briefly wondered if she once had an account there. But she never acted, soon realizing the text was another scam.
“It’s really easy to be tricked,” Davis said. “This smishing scam is really prevalent.”
Smishing is a word that blends phishing with the SMS term for “short message services” or texts. Sometimes, it’s called SMS phishing or a suspicious SMS text messages.
Scammers pose as a bank or pretend to be from Amazon and send a fake text about suspicious activity on your account or a delayed package only to get you upset. Once you engage, the scammers even know how to lure you into paying thousands of dollars to supposedly fix other things, including phony legal troubles.
You could be tricked into putting cash on gift cards or buying Bitcoin after receiving one of these robotexts. Or sending a crook money via Zelle.
Block the calls; do not engage
It’s important to avoid engaging and recognize signs of a scam along the way.
Be suspicious if a bank is saying it’s urgent that you act immediately or confirm account information. Your credit union or bank is never going to ask for your PIN, access code, or other sensitive financial information through text or email.
“While we are not able to prevent third party texts such as these, we would recommend blocking the sender so you do not receive any further contacts from this source,” MSUFCU posted on its website.
The sad truth is, though, that scammers often use different numbers or addresses for each message they send, making it tougher to block numbers on your own.
You can report texting scam attempts to your wireless service provider by forwarding unwanted texts to 7726 — or “SPAM”.
You should call the bank before jumping to the wrong conclusion. And if you responded to what’s likely a scam text, you’re going to want to change your password and contact your bank, too.
How to report fraud to your bank
Consumers who give up their credentials are looking at a major league headache, as they could end up battling with their bank for relief. But in some cases, there is relief.
“If you did not initiate the transaction, you are not responsible and the bank needs to protect you from liability,” said Lauren Saunders, managing attorney at the National Consumer Law Center.
Saunders noted that banking regulations offer some protections in specific cases but consumers need to avoid scams and protect their money, too.
“You should never give away information needed to log into your account,” she said. “But if you are tricked into doing so, you are still protected from unauthorized charges.”
She noted that the Consumer Financial Protection Bureau clarified this question last year in its FAQs on electronic fund transfers.
Saunders said the CFPB is referring to the Electronic Fund Transfer Act, which governs both Zelle and debit cards. A consumer’s credit cards has protections under the Truth in Lending Act.
It’s far tougher to get your money back if you put money on gift cards, buy Bitcoin or send or transfer the money out of your bank account yourself. In many cases, you’re out the cash.
“The answer may be different if you initiate the transaction,” Saunders said, such as if you are the one who sends a scammer money by Zelle.
“A transfer that you initiate does not meet the definition of ‘unauthorized transfer,’ ” Saunders said.
“However, depending on the circumstances, it might be an error that the bank still has to correct. The law is not clear in that area,” Saunders said.
The Consumer Financial Protection Bureau specifically addressed the case when someone calls a consumer and pretends to be a representative from the consumer’s financial institution — and then tricks the person into providing key information, such as a texted account confirmation code or debit card number, that can be used to initiate an electronic funds transfer of money from the customer’s bank account.
In that case, the FAQ noted, the transfer is viewed as an unauthorized electronic funds transfer under Regulation E.
The same is true if the third party uses phishing or other methods to gain access to a consumer’s computer and observes the consumer entering bank account login information.
The consumer must notify the bank of the fraud. The bank has 10 business days to investigate the claim and reach a decision. If they find that the transfer was unauthorized, the bank is obligated to protect the consumer from liability.
If the bank needs more than 10 business days for the investigation, Saunders said, the bank needs to give you a provisional credit and then can take up to 45 calendar days to investigate. But she noted that the bank can reverse the credit if they conclude the transfer was authorized.
What’s best, of course, is to avoid those fake texts and phony calls completely.
Step back If you think the text could be legitimate, contact the company directly and not at a number listed on the text or left in your voicemail.
Do not respond to suspicious texts, according to the FCC warning, even if the message requests that you “text STOP” to end messages.
Don’t click on any links in emails or texts. Don’t give out any personal information or passwords or codes to verify your identity.
False texts and fake order scams quickly turn into ways for con artists to drain your bank account and steal more money than you’d imagine