Understanding Types of Bank Fraud

You have probably seen or heard the word bank fraud and conjured meaning to it but you didn’t actually have a close encounter with it. Bank fraud in Wikipedia simply means the process of obtaining assets, usually money or property from a financial institution or bank through fraudulent means.

You can put that to an example as a person acting to be employed in a bank and obtaining money, bond, or anything else from a depositor or investor of that bank. That person is therefore, committing a bank fraud.

So, how does a bank fraud works? There are so many ways on how it can be committed. It is basically categorized depending on the type of financial security that is being stolen or obtained from a depositor or investor.

Here are some examples of bank securities that can be considered as bank fraud:

1. Stolen checks. One of the ways of obtaining money from a depositor of a bank is by stealing his or her checks. This can be converted into cash in the bank by impersonating and forging the identity of the check owner.

2. Forgery and altered cheques. Another means of stealing or fraudulent acquisition of depositor’s money is by altering a check. This is a very dangerous bank fraud, but professionals can actually do this without fail with trusty bank tellers and even managers.

3. Accounting fraud. There are many ways an accounting fraud can be done through banks. These is a dangerous game, but bank frauds who deal with accounting fraud can actually walk away with great sums of money.

4. Rogue traders. Another way of obtaining money from depositors is by going rogue and trading off fraudulently. A good example of this are the emails that you might receive from unknown bank impersonators who make up lies and stories about dead depositors without next to kin beneficiaries. In the end, these rogue traders will extort money from you for security and other reasons.

5. Fraudulent loans. Bank frauds are becoming more and more creative as years pass by. These days, they are also going for depositors who are trying to get loans from their bank or credit companies. The fraud works by extorting money from these depositors by making them believe that their loans are being processed and they need the money to pay the equivalent processing fees.

6. Another way of committing fraudulent loans is by using another name to pass the loan requisite. This bank fraud also coincides with identity theft, although very creative bank frauds use names that are not really true with or without help from an insider of the bank. This is a very dangerous bank fraud, but is usually used by a lot of cons because it is one of the easiest tricks they can come up with.

7. Forged or fraudulent documents. In the most part of known bank fraud, document fraud is one of the oldest and easiest things to obtain or do. This is usually necessary in all forms of bank frauds.

These are just some of the things you need to know about bank fraud.