Someone is trying to scam you out of $50,000. Can your bank protect you?

Janet Nguyen Feb 22, 2024
A personal finance columnist said she was duped by fraudsters who claimed to be part of the FTC and CIA.

Someone is trying to scam you out of $50,000. Can your bank protect you?

Janet Nguyen Feb 22, 2024
A personal finance columnist said she was duped by fraudsters who claimed to be part of the FTC and CIA.

Financial advice columnist Charlotte Cowles told her readers that she was scammed out of $50,000 late last year after fraudsters gained her trust by impersonating officials at the Federal Trade Commission and even the CIA.

In a piece published last week in The Cut, a website created by New York magazine, Cowles explained how she became entangled in the elaborate scheme. After giving up the $50,000, Cowles realized later that day she had been scammed. 

Cowles took the money from her Bank of America account. We asked if she wished the bank had put safeguards in place to prevent the loss.

“In many ways I wish the bank had stopped me, but I certainly don’t blame them for allowing me to make that withdrawal,” Cowles wrote in an email. “They were also very helpful in providing me with instructions to safeguard my accounts after I reported the scam to them.”

Cowles’ $50,000 is a drop in the immense bucket of money that swindlers are pilfering from the public. Consumers lost $8.8 billion to scams in 2022, a 30% increase from the year before, according to the Federal Trade Commission. Some scammers have adopted more sophisticated methods that employ artificial intelligence. One tactic is the use of AI-generated voices to mimic the victim’s loved ones. 

When Cowles went to her bank to make the withdrawal, the teller gave her a document that warned her against scams. But in situations like these, banks have few tools to safeguard clients against con artists.

Different banks have different policies 

Paul Benda, executive vice president for risk, fraud and cybersecurity at the American Bankers Association, said banks and their branches vary in how they handle requests from customers who are trying to gain access to sizable amounts of their own cash.

At some branches, depositors can withdraw $50,000 without advance notice. But Benda said others may not have large sums on hand and will ask customers to call ahead if they plan to take out that much.

He added that the definition of a large sum will also vary among banks — amounts above $10,000 might qualify in one locale, while it might be $100,000 in another region.

Benda explained that at some banks, tellers might ask their manager to have a conversation with the client if their request seems unusual. 

Adam, an Ohio bank teller whose real name we’re withholding to protect his privacy, said if someone wanted to make a big cash withdrawal, typically he would first try to offer alternatives in the interest of fraud prevention.

He would suggest a wire transfer or a cashier’s check, which can be traced and guarantees the funds to the recipient. 

Often, Adam said, his bank deals with people who are remodeling their home and their contractor wants to be paid in cash. With no paper trail, though, the contractor can claim they were never paid, but a cashier’s check can mitigate the risk. 

He said he works for a big bank, but at a small branch, and it’s unlikely that the location would have $50,000 available to give to one depositor. You can compare the branch to a grocery store, Adam said. It might have only 50 gallons of milk that week, and once that’s gone, it has to order more. Likewise, his office can order more cash, but the greenbacks might not be delivered for a week. The branch is set up to deal with smaller sums in the ballpark of $8,000 to $12,000. 

ATMs also put restrictions on the amount clients can withdraw, to both prevent fraud and ensure they have enough money in their reserve for other customers.

If the client is adamant about taking out $50,000, Adam said, the staff would direct them to another branch in the area that’s more accustomed to large cash withdrawals. 

Adam recounted that at a different bank, he once dealt with a depositor who said the police, whom he had on the phone, needed him to withdraw $3,000. Adam said he tried to talk the customer out of it, but the guy insisted, so Adam relented. The depositor came back the next day, revealing that he had been scammed. 

Although tellers can say someone may be trying to defraud you, they ultimately can’t stop you from retrieving your money.

“I don’t think we want a bank teller being put in the position to make mental health judgments on people,” Benda said. “So assuming there’s nothing very clearly wrong with that person, they generally are going to provide access to the funds.” 

Benda said that once someone withdraws cash, the bank “can’t hold any liability once it’s gone.” 

What do major banks have to say about their policies? 

Marketplace asked Bank of America and other major institutions whether tellers have to follow certain protocols when customers try to withdraw large sums or might appear to be victims of a scam. 

A BofA spokesperson said its policy is to provide written guidelines on how to protect yourself, which include warning signs to look for. The spokesperson added that this is the same document Cowles was given when associates suspected she was being conned. 

A Chase spokesperson emailed this statement: 

“We don’t restrict customers from accessing their money. However, there are instances where funds are held for additional verification. This includes times where one of our bankers suspects that our customer may be accompanied by someone who appears to be pressuring them. We train our bankers to look for that.”

A representative of U.S. Bank wrote: 

“Our bankers receive training and are encouraged to ask questions when a transaction seems unusual. … However, there are natural limitations or challenges when it involves a client initiating or making an authorized transaction on their account and for that reason proactive education on how clients can spot and avoid a scam are a critical focus area for our team.” 

What can be done to stop the scams? 

Benda thinks the telecom industry should prevent people from being able to “spoof” phone numbers, or have a false number appear on caller ID. 

In her piece, Cowles wrote that the fake CIA agent claimed he worked on cases connected to the FTC. He was able to spoof the FTC’s phone number to “prove” that he was from the agency. He said government numbers can’t be spoofed, which is untrue. 

“It shows that these criminals use caller ID as a key piece of evidence to make the customer trust them,” Benda said. “If someone goes into [a bank] and says, ‘Well, I’ve got the caller ID’ or ‘I’ve got this,’ it’s hard to battle against that once that person is in that belief system.”

In February, Benda spoke before the Senate Committee on Banking, Housing, and Urban Affairs during a hearing on fraud in the banking system. He brought up methods to curb spoofing, saying: “Only callers whose calls are fully authenticated … should be able to display data in the recipient‘s caller ID display.” 

Suzanne Lynch, a professor of practice in economic crime at Utica University, noted that Connecticut has a new law to protect seniors from financial fraud that will go into effect in July. 

Lynch said the law will allow financial institutions to pause transactions on accounts that belong to adults over 60 if they suspect exploitation. She added that the institutions won’t be held liable as long as they’re acting in good faith. 

She said she’d like to see similar laws across the country, although she noted that the interpretation of “good faith” is subjective.

Although the law is meant to protect older Americans, younger generations are also susceptible to financial scams.

As Cowles pointed out in her column, the FTC has reported that Gen Xers, millennials and members of Generation Z (taken together, those between the ages of 18 and 59) are actually 34% more likely than people 60 and over to report losing money to fraud.

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