What are the different types of bank fraud cases?

Bank fraud is a serious financial crime that involves illegally obtaining funds from a bank or other financial institution. Bank fraud cases are generally distinguished from direct bank robbery as they rely on the use of deceit and trust tricks rather than threat or use of violence. Bank fraud cases come in many different forms, including various types of check fraud, identity theft, embezzlement, and document fraud.

Many cases of bank fraud involve theft, forgery, alteration or misuse of checks. The simplest form of this type of fraud can be check theft, where the criminal steals someone else's checks and uses them to make purchases. Criminals can also use forgery to alter the checks they receive for a transaction, for example, turning a $20 check into a $200 check by adding a zero. Merchants can help prevent check fraud by instituting strict identification policies that ensure that a customer cannot use a check that is not verified through identification; Consumers can also help prevent these bank fraud cases by carefully reviewing their check history to ensure all checks match receipts.

Check fraud can also be carried out by the legitimate owner of the checks. Check kitting, or writing bad checks, is a type of bank fraud that involves issuing checks despite knowing that there are not enough funds in a bank account to cover purchases. The frequent occurrence of this form of check fraud is why many companies only accept checks up to a certain US dollar amount and why many financial institutions charge a high fee for bad checks.

Bank fraud cases related to identity theft are a serious and growing problem in the Internet age. With so many transactions taking place online, thieves and hackers can often access the bank account and credit card information of unwitting consumers. Fraudsters can also use obtained names and addresses to apply for fraudulent accounts, credit cards and loans.

Embezzlement occurs when a bank employee steals funds from clients or the bank itself. Banks strictly protect themselves against embezzlement in a number of ways, as this type of bank fraud can be extremely damaging to the institution's reputation. Bank fraud cases involving insider theft are usually handled by people with considerable power within a bank branch as they have more access and opportunities and are generally considered to be trustworthy.

Document fraud involves creating false documents to help a scammer get a loan or open an account. Documents that may be false include identification cards, title deeds, references or declarations of assets from other institutions. Fraudsters can use these documents to open accounts under false identities or to receive preferential rates and account options. In some cases, the criminal will attempt to obtain a loan using false names and false documentation, and then “disappear” after receiving the funds, leaving the bank with serious losses.

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