Card Cracking Scam Fighting Identity Crimes

Card Cracking Overview:

Social media has given new life to an old-fashioned check fraud scam with the prevalence of card cracking. Card cracking is a form of bank fraud in which both the fraudster and target may be held liable. The scheme gained momentum in Chicago, but has quickly spread to other metropolitan areas.

College students, newly enlisted military members and young single parents are most at-risk of being targeted. Lured in by the prospect of making some quick cash, these individuals end up implicating themselves in a crime.

The Scam Walkthrough

A crook will advertise their scheme on social media as an easy way to make money. Their profile will show a lavish lifestyle filled with money, cars and designer clothes. Targets will be offered a cut of the money and the promise of the high life in exchange for their participation.

If the target agrees to participate, the fraudster will request their debit card information (sometimes including mobile/online banking login credentials) and will deposit a fraudulent check (stolen or counterfeit) into the target’s account. The fraudsters will quickly withdrawal the money before the bank realizes the deposit was from a fake check.

The participant may receive a portion of the funds, but most likely the fraudster will just hightail it out of there — leaving their target penniless. That’s when the real issue comes to light. The check will soon bounce, your bank will remove the deposited funds and come to you looking for money and answers.

The Implications

Card cracking creates some rather serious repercussions for both you and your bank.

If you’re involved in a card cracking scam, you’re facing several serious problems — even if you’re only acting as the pawn in the scheme. Many banks will have you repay the cost of the bounced check, plus additional fees.

Many card cracking orchestrators tell their targets to file a fraud report once the check bounces so they can get their money back — this is not a good idea.

Banks are well aware of card cracking and officials say that targets are innocent in only a very small percentage of cases, so they know to be weary of fraud reports in cases like this. Also, by filing a false fraud claim you become co-conspirator to fraud, which is punishable by law.

Card cracking is not a victimless crime.

A survey by the American Bankers Association found that banks were hit by more than $18 million worth of card cracking attempts since January 2013. The loss amounted to more than $6 million in more than 2,600 card cracking scams. In the end, these fraud costs will be indirectly passed on to consumers via higher rates and fees. So every time a fraudster commits card cracking, they’re stealing from everyone in their community who uses that bank.

So What Should You Do?

  • Never respond to an online solicitation for “easy money.”
    These get rich quick schemes are just that — schemes to steal your money. Card cracking advertisements and similar scams will tell you there’s a quick, safe way to earn cash. But earning an honest living takes time and getting involved in these dealings will just set you back.
  • Never share your financial information.
    Keep information like your account number, PIN number and other bank account information private at all times. By sharing it with others, you expose yourself to potential fraud.
  • Act quickly if you’re a target
    If you’ve already fallen for a card cracking scam, there are still ways you can help alleviate some of these implications. Contact your bank immediately and explain the situation, you have to file a police report and will likely have to repay the cost of the bounced check. However, it is a lot less serious then the consequences you would face trying to cover it up.

For more information about scams and identity crimes, please visit the Fighting Identity Crime’s Resource Center.