zombie bank accountsWhen we think of identity theft, we tend to only think about credit-related identity theft, but the truth is that there are many more variations to be concerned about. This is especially true after the fallout of the Equifax breach and the scandals in the financial industry from 2017. One of the biggest threats to be aware of is zombie banking accounts. To help you understand what zombie accounts are and why you should be worried about them, we’re breaking down everything you need to know.

What are zombie bank accounts?

Zombie bank accounts, like other types of zombie scams, end up strangling victims with debt and fees from old (and sometimes fraudulent) accounts. Zombie bank accounts tend to be checking or savings accounts which appear in your name, but may or may not be yours. These accounts usually come with the headache of owing fees for any outstanding payments, overdraft charges or account balance minimums. Even if you aren’t aware of these accounts, since they appear in your name, you’ll be directly affected by the consequences of not paying any fees. Usually, these unpaid balances end up in collections and can tarnish your credit scores without your knowledge. It’s this aspect of zombie accounts that makes them so frightening.

How are these accounts created?

These accounts can be created in a myriad of ways, but they usually stem from accounts remaining open or being reopened after they were supposed to be closed out. While this can often occur as the result of simple clerical errors, it can also be the result of fraud. With your name, address and social security number, anyone can open up accounts and rack up fees in your name. In rare cases, even banks can partake in this behavior, as seen in the Wells Fargo financial scandal.

How can you spot these accounts?

Zombie account scams illustrate the importance of consistently monitoring all of your accounts, especially your main financial accounts. Looking at your account transactions weekly or even monthly could help you catch such anomalies. You’ll also want to make sure to follow up with your bank whenever closing an account to ensure that it was properly closed. Finally, you’ll want to have a look at your Chexsystems report. Like a credit report, your Chexsystems report details aspects of your financial history and will allow you to identify accounts that don’t belong to you, including ones opened at banks other than your own.

In the instance your Chexsystems report details accounts that look unfamiliar, you should first contact the bank(s) where these accounts are managed to verify their origins. If the accounts were previously closed, you should mention this in your conversation and offer proof if possible. It’s likely that in many cases talking to the bank(s) to get any zombie accounts closed will be sufficient; however, if it isn’t, you can contact Chexsystems and ask them to remove the account(s) in question from your record. Keep in mind that if the account is in collections, you will not only have to provide the collection agency proof of the incorrect data, but also make sure the collection account is removed from your credit reports. As such, it makes sense to also keep up with your credit reports to make sure everything is ironed out. It may be worth investing in a credit monitoring or identity theft protection service during this time, too, because most of these services will alert you of any new or changed accounts that appear on your credit reports.

Zombie scams can take many forms, which is why it’s important to know what to look for if you’re ever contacted about an outdated bank account or unpaid debt. Keep reading our scams blog to learn how to protect yourself from these and other scams.