Card crackingThe face of fraud is always changing, and while we hear a lot about scams targeting the elderly or tech newbies, scammers are always expanding their reach to different demographics. One scam that emerged in 2011 and has since peaked is known as card cracking, which targets vulnerable millennial populations like cash-strapped college students, young military recruits and single parents. To help you avoid falling for this hard-hitting scam, we detail everything you need to know about card cracking.

What is card cracking?

Card cracking was created when a series of new banking scams occurred in South Chicago, as reported by the FBI. Although there are a number of card cracking methods, the most common involves scammers get a hold of a victim’s banking information in order to deposit bad checks and withdraw the funds as soon as they credit the victim’s account. Since the checks have no value, this allows scammers to make money before the bank can recognize the fraud checks and rescind the funds. While some scammers will only withdraw the amount they deposited, more aggressive ones will thoroughly clean out a victim’s account.

It should be noted that there are circumstances in which the victim may find themselves on the hook for any missing money after the bank discovers the fraud, but it depends on how the scammer received the financial information and whether or not the fraud was reported by the victim. If the victim is on the hook, they may also find themselves at risk of being deemed an accomplice to bank fraud, which could result in a fine of up to 1 million dollars as well as up to 30 years in prison, according to U.S. Government Publishing Office.

How does the scammer get the victim’s banking information?

Although most scammers take different approaches to gather their victims’ banking information, they usually all use social media, text message, email or another form of digital communication. That said, some scammers will take an in-person approach. In terms of gathering the banking information from their victims, cracking scams are usually advertised as legitimate financial aid – like scholarships and student loan forgiveness — or someone offering a friendly gesture to help the victim out with no strings attached. An in-person cracking scam usually involves a scammer tugging on victims’ heartstrings, stating that their personal accounts are frozen and they have no access to money, so they need to the victim to cash a check for them. These in-person scams are most common on college campuses, as the scammer will pose as a fellow student.

Interestingly, the most common variations of card cracking involve willing victims who think they’re either signing up for an online job or a way to earn “easy money.” Scammers, who are often millennials themselves, will advertise their lavish lifestyles on social media alongside the financial help they can provide a peer to help them achieve their perceived success. In exchange for sharing banking information, victims are promised kickbacks that provide financial relief, but once the scammer has the account information, they start to deposit bad checks and withdraw funds immediately.

How to protect yourself from card cracking

1. Don’t give banking information to strangers. The key to fighting against card cracking is to be aware of who you provide your financial information to and recognize that you should never provide such sensitive information to a stranger. While such advice seems obvious, these scams use context to make unreasonable demands appear legitimate, especially to those with limited financial experience like a young college or high school student who may think it’s normal to share bank account information for a scholarship or job opportunity. And since this type of scam targets younger individuals who may not have much real-world experience, it’s possible that victims do not realize they are being scammed or the full ramifications of a scam. That’s why it’s essential for everyone to be educated about these scams and the full extent of their consequences.

2. Remember if it sounds too good to be true, it likely is. The concept of free or easy money is a nice idea, but it’s important to remember that these offers are almost always a scam. As such, if you receive an email or Facebook message from someone you don’t know who claims to be someone who guarantees you’ll make money if you just hand over your banking information, you should recognize that you’re being scammed. Similarly, if someone ever asks you to deposit or cash a check for them because they’re unable to at the moment, it’s in your best interest to decline their request and inform them that they can usually cash the check at the bank it was issued from (even if they don’t have an account). Even if you want to help the person out, it’s safer to decline, especially if the requester is someone you don’t know.

3. Report any odd banking activity as soon as you spot it. Checking your bank statements should be a regular part of your routine, as it can not only alert you to a potential breach of your debit card, but it can also help you spot any other odd banking activity, such as a deposit that you weren’t expecting. Although we all like the idea of an accidental deposit, failing to report such a transaction may land you in hot water if it ends up being a card cracking scam, which is why it’s best to report any odd activity to your bank or financial institution as soon as you spot it.

For more information about emerging and ongoing scams, read our scams blog, where you can find tips and tricks for combating fraud and protecting yourself and your family.