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What is Card Cracking?
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Caitlin
Student Contributor
Posted September 8, 2016
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What is card cracking?
Card cracking is a type of account fraud where the scammer asks for your checking account information or debit card and PIN. Once they have your account information, the scammer deposits fraudulent checks or counterfeit bills into your account and immediately withdraws the money, oftentimes giving you a portion of the funds.
 
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How does it work?
It takes advantage of the check clearing process, which can take a few days. For example, your friend Bob writes you a check. After you deposit the check to your financial institution’s account, it’s sent to Bob’s financial institution. Once Bob’s financial institution verifies the money is in Bob’s account, it sends the money to your financial institution, “clearing” the check.
 
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What happens when there’s no money in Bob’s account?
The financial institution won’t send the money, and the value of the check that you deposited is withdrawn from your account. This process can take time, and scammers withdraw funds from the account before the fake check is discovered. Finally, both financial institutions realize the check isn’t backed by real money, so the check is withdrawn from your account. However, the scammer has already withdrawn the check amount in cash, so the money that was deposited isn’t there to withdraw.
 
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Who are the targets of card cracking?
Card cracking victims tend to be individuals who are looking for ways to earn fast cash. These individuals are usually college students, young adults, recently enlisted members of the military, and people who are experiencing a tight budget. Unfortunately, card cracking is illegal and won’t put you in a better financial spot. At the very least, you’ll have to pay back the money lost in the fake check transaction.
 
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Where does this scam take place?
These scams can happen in person but are most prevalent online, particularly via social media. Scammers will promote schemes on sites such as Instagram, Twitter, Facebook, dating sites, etc. They will use the allure of scholarships or earning a portion of the proceeds to make the victim believe that they can benefit from the opportunity.
 
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How do you prevent card cracking?
Many card-cracking scams are avoidable, and you have the power to take the necessary steps to steer clear of them and teach your family and friends to do the same. Do not provide personal or financial information to an unreliable or suspicious source. Never share your PIN, and do not write it on your card. Cancel lost or stolen cards immediately. Report suspicious activity to the proper agency. Regularly check your credit report and your financial institution account for suspicious activity, to protect yourself from this and other types of scams.
 
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