Phoney Bank Inspector Scam

Last modified: 21 August 2015

Long before the Internet, identity theft or sophisticated online scams, fraudsters would impersonate a bank investigator and trick unsuspecting consumers into providing their own money to “aid” a criminal investigation.

How the scam works

There are many variations to this scam but, in general, this is how it plays out:

  • An individual (often a senior) receives a phone call from someone who knows their name.  
  • The caller claims to be a bank inspector (bank manager, police investigator, etc.) and explains that the bank is investigating a series of fraud cases that have been committed by staff at the individual’s branch.
  • The caller then asks the individual to withdraw a large sum of money from their account that will be inspected and used as evidence as part of the investigation.
  • The caller explains that, because the suspected criminal works at the branch in question, the individual should not tell the branch staff why they are withdrawing the money.
  • After the money is withdrawn, the victim is advised to meet the “investigator” at a pre-determined nearby destination, where the money is handed over for investigation.
  • Once the money changes hands, the victim is instructed to return home and await a phone call confirming that the money has been re-deposited into the original account.
  • Unfortunately, no call comes, the money is not returned and the “inspector” is never heard from again.

Protect yourself

The painful irony of this scam is that it is an individual’s honest desire to help catch a criminal that ends up turning that person into a victim. And because the individual has withdrawn the money from his or her own account and handed it over to criminals voluntarily, they are unlikely to be reimbursed.  

Luckily there are a few simple precautions that individuals can take to ensure they don’t fall prey to this type of fraud.

  • It is important to remember that neither your bank nor a police investigator will ever request that you assist in an undercover investigation or ask you to withdraw money from your account. If you receive such a suspicious call, hang up and call police.
  • Never give out personal bank information over the phone unless you have called your bank and they ask you questions to verify your identity.
  • If you do need to withdraw a large sum of money for a legitimate purpose, request a bank draft or a money order as this ensures only the intended recipient is able to access the money. Criminals will not accept these forms of payment because it creates a paper trail that can be used by real investigators to track the fraudsters.
  • Check your bank statement frequently and report any irregularities to your bank as soon as you notice them.

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