Common Fraud Schemes:
Tax Refund Fraud
The American Banking Association reports a significant increase in fraudulent tax refunds filed using consumers’
stolen information. They explain, “Tax refund fraud involves identity theft, fraudulent W-2 forms and the online
filing of a fraudulent tax return for the purpose of receiving a tax refund for deposit into the account of the
fraudster or a money mule acting on behalf of the fraudster.” They also noted a variation of this fraud also
include using a tax preparation firm and obtaining a refund anticipation loan. Read more on the
American Banking Associations fraud and security site.
Phishing is a new twist on an old telemarketing scam, but uses e-mail. These criminals
send e-mails to millions of people hoping that even a few will give away valuable
information. Consumer education is a powerful weapon in the fight against phishing. To
avoid becoming the victim of a phishing scam, we are offering the following tips: Instead
of clicking a link claiming to be from your financial institution, type their web address
into your browser; Never give out your personal or financial information in response to an
unsolicited phone call, fax or email, no matter how official it may seem; Do not respond to
email that may warn of dire consequences unless you validate your information immediately.
Contact the company to confirm the email's validity using a telephone number or web address
you know to be genuine; Check your credit card and bank account statements regularly and look
for unauthorized transactions, even small ones. Report discrepancies immediately. When submitting
financial information online, look for the padlock or key icon at the bottom of your Internet
browser. Report suspicious activity to the Internet Crime Complaint Center, a partnership between
the FBI and the National White Collar Crime Center.
If you have responded to an email, contact your bank immediately so they can protect your account
and your identity.
Mortgage Transfer Scam
This is a scam in which the scammer attempts to have you send mortgage payments
to them. You get a letter in the mail stating that your mortgage has been sold.
It looks official and has the address where to send all future payments.
Having a mortgage sold or transferred is commonplace, especially in the current
climate of large numbers of banks and mortgage companies merging. It wouldn't be
surprising to receive a letter like this, especially if you have recently refinanced.
You begin sending your payments to the new address and a few weeks later you are
receiving collection letters and phone calls suggesting that you are behind on your
mortgage. Of course you are confused as you have been making your payments to the
new company. You try and explain this to what you believe to be your former mortgage
company but they tell you that your mortgage has not been sold. Your most likely
behind two mortgage payments (maybe three) by the time you figure out you have been
Please note that you should receive a letter from your current financial institution
prior to being contacted by the new loan servicing company. If the only letter you
receive is from the supposed new loan servicer, it is very likely not legitimate.
It is advisable to call your mortgage company directly and obtain a verbal confirmation
that the letter is legitimate and that your loan has been transferred.
Classifieds/Online Auction Scam
It is common for sellers on classified and online auction websites to receive fraudulent
offers for the items they have listed. In most cases the fraudster represents themselves
as an individual that may live out of state or outside of the U.S.. They offer to
make payment arrangements using a money order or cashier's check for significantly
more than the sales price of the item. The seller is asked to deposit the counterfeit
check and ship the merchandise to the requested address. The seller is of course
out the cost of shipping and their merchandise.
Nigerian Purchase Scam
The Nigerian Purchase Scam is very similar to a classified or online auction scam.
A fraudster will bid on a website offering and "accidentally" overpay the seller,
stating they "wanted to send enough funds for shipping." The fraudster will request
that the seller refund the amount of the overpayment. The seller will deposit the
counterfeit check and send the overpayment to the buyer prior to the check clearing
through the international banking system. The seller is then out the funds returned
for overpayment and also out their merchandise.
In the lottery scam, the victim will receive an email notification claiming that
they have won a foreign lottery. In order to claim the winnings, the winner is instructed
to contact a claims agent. The agent then generally sends a claim form to verify
identity. The victim is asked to return the form with personal details, along with
copies of a passport and/or driver's license to "verify identity." The fraudsters
now have information to duplicate the victim's identity. In addition, in order to
claim the winnings, the victim is asked to wire funds to the fraudsters to cover
the transaction, insurance, tax and legal fees associated with receiving their winnings.
Fraudsters will send an email or a letter in the mail from a "mystery shopping company,"
oftentimes the name of the company sounds official. Usually there is a fraudulent
check included. They instruct the would-be victims to cash the check and to complete
a shopping assignment at a major retail store. Victims are then instructed to send
the unspent portion of the check to another mystery shopper (the fraudster) via
Western Union®. When the check does not clear the victim is responsible for the
secret shopper charges and the funds wired.
Common Check Scam
Generally an individual will receive an email or letter stating they won a lottery
or cash prize. In both scenarios the victim is sent a counterfeit check and asked
to return some portion of the check value. In all cases the victim is out funds
sent back for lottery related fees or merchandise.
Please be aware that in most scams, losses are impossible to recover. Additionally,
in many states if you cash a counterfeit check you may be considered to be assisting
a criminal in passing a counterfeit check or money laundering.
Lewiston State Bank will never solicit your personal information by phone, auto-dialer,
text message, email or provide links within an email requesting that you update
your information. You will not receive at any time an email notification asking
you to click on a link or visit a website to unlock/unsuspend your account or to
provide any private information unless otherwise requested by you through the Online
Banking password self-reset feature. If you receive an email or phone call requesting
confidential information from someone claiming to represent Lewiston State Bank,
please do not respond. Please be aware of these types of
designed to obtain information from you.
Report Fraud or Suspicious Activity
United States Secret Service - Protecting Yourself Federal
Bureau of Investigations - Common Fraud Schemes Federal
Deposit Insurance Corporation - Identity Theft & Fraud
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