Back-to-school scams are as popular as new backpacks and sneakers.
Logic. Parents and students are busy deleting items from the back-to-school list and everyone is stressed and distracted during the last days of summer.
Scammers know it’s easy to catch you off guard with fake texts that may include the shocking news that someone has placed an order for a big ticket item, say an iPhone, on your Amazon or Apple account.
Think about it, you might have just ordered a new comforter and sheets for your dorm room from Amazon anyway. Or you took out a credit or debit card for books or other items. A text might not be a total surprise. But we only see more signs that scammers are working hard to impersonate big, trustworthy brands.
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MSU Federal Credit Union — Michigan’s second-largest credit union with nearly $6.9 billion in assets — is warning students and other members that scammers are sending fake texts with alarming messages. The credit union began to see an uptick in early August.
In some cases, members of credit unions receive fake texts that can seem quite generic. They might appear to be from the credit union, but the text might not include the name of a financial institution. Consumers may mistakenly assume the text is from their financial institution, according to Deidre Davis, director of marketing for MSUFCU.
The text could say something like: Call now, Visa card temporarily locked.
The knee-jerk reaction – which the scammers hope you will have – is to immediately call or click on a link to unblock an account or process a suspicious purchase.
A consumer might feel pressured to “log in” to a fake website as part of the process set up by the scammers.
“Now they capture everything they need to really rip the person out of their money or steal their identity,” Davis told the Free Press.
Robotext scams are on the rise
According to the Federal Communications Commission, Robotext scams are on the rise and could use robocalls as a tool for scammers.
Consumer complaints to the FCC about spam text messages have increased steadily in recent years, from 5,700 in 2019 to 15,300 in 2021. This year through June 30, the FCC said it has already received 8,500 complaints about the robotexts.
“SMS messages may include false but credible claims about unpaid bills, package delivery issues, bank account issues, or law enforcement action against you,” the FCC warned.
The information in these texts can be confusing and designed to prompt someone to engage quickly.
Many people nowadays avoid answering a call from an unknown number. But ignoring what looks like an urgent text message? Well, we’re going to have to learn how to do that too.
Davis at the MSUFCU said she received text messages that appeared to be from banks, such as Chase, where she did not have an account. She even briefly wondered if she ever had an account there. But she never acted, soon realizing the text was another scam.
“It’s really easy to be cheated,” Davis said. “This smishing scam is widespread.”
Smishing is a word that mixes phishing with the SMS term for “short message services” or SMS. Sometimes this is called SMS phishing or suspicious SMS messages.
Scammers impersonate a bank or pretend to be from Amazon and send a fake text about suspicious activity on your account or a delayed package just to annoy you. Once you sign up, scammers even know how to trick you into paying thousands of dollars to supposedly fix other things, including bogus legal issues.
You might end up putting money on gift cards or buying bitcoin after receiving one of these robotexts. Or send money to a scammer via Zelle.
Block calls; do not engage
It’s important to avoid getting involved and recognize the signs of a scam along the way.
Beware if a bank tells you that it is urgent to act immediately or to confirm account information. Your credit union or bank will never ask you for your PIN, passcode, or other sensitive financial information via text or email.
“While we are unable to prevent third party text messages like these, we recommend that you block the sender so that you no longer receive contacts from this source,” MSUFCU said on its website.
The sad truth, however, is that scammers often use different numbers or addresses for each message they send, making it harder to block the numbers on your own.
You can report attempted SMS scams to your wireless service provider by forwarding unwanted SMS to 7726 – or “SPAM”.
You should call the bank before jumping to the wrong conclusion. And if you’ve replied to what is likely a scam text message, you’ll also want to change your password and contact your bank.
How to report fraud to your bank
Consumers who give up their credentials face a major headache, as they could end up fighting with their bank for relief. But in some cases there is relief.
“If you didn’t initiate the transaction, you are not liable and the bank should 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 also need to avoid scams and protect their money.
“You should never give out the information needed to log in to your account,” she said. “But if you do, you’re still protected against unauthorized charges.”
She noted that the Consumer Financial Protection Bureau clarified this issue last year in its Electronic Funds Transfers FAQ.
Saunders said the CFPB was referring to the Electronic Funds Transfer Act, which governs both Zelle cards and debit cards. A consumer’s credit cards are protected by the Truth in Lending Act.
It’s much harder to get your money back if you put money on gift cards, buy Bitcoins, or send or transfer money from your bank account yourself. In many cases, you are out of money.
“The answer may be different if you initiate the transaction,” Saunders said, for example if you’re the one sending money to a scammer through Zelle.
“A transfer you initiate does not meet the definition of ‘unauthorized transfer,'” Saunders said.
“However, depending on the circumstances, this could be an error that the bank has yet to correct. The law is unclear in this area,” Saunders said.
The Consumer Financial Protection Bureau specifically addressed the case where someone calls a consumer and pretends to be a representative of the consumer’s financial institution – then tricks the person into providing key information, such as a confirmation code. SMS account number or a debit card number, which can be used to initiate an electronic funds transfer from the customer’s bank account.
In this case, the FAQ noted that the transfer is considered 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 inform the bank of the fraud. The bank has 10 business days to investigate the complaint and make a decision. If they find that the transfer was not authorised, the bank is required to protect the consumer from liability.
If the bank needs more than 10 business days to investigate, Saunders said, the bank must give you interim credit and then can take up to 45 calendar days to investigate. But she noted that the bank can cancel the credit if it finds the transfer was authorized.
The best, of course, is to avoid these fake text messages and fake calls altogether.
If you think the text might be legit, contact the company directly and not a number listed on the text or left in your voicemail.
Do not respond to suspicious text messages, per the FCC warning, even if the message asks you to “text STOP” to end the messages.
Do not click on any links in emails or text messages. Do not disclose any personal information, password or code to verify your identity.
Fake text messages and fraudulent fake orders quickly turn into ways for scammers to empty your bank account and steal more money than you imagine