Bamboozled: ‘Card-cracking’ scheme sets sights on financially inexperienced students

It’s time to have a very important money conversation with your college student.

Most students have limited education in personal finance matters, and they know even less about the dangers of identity theft.

Even though they don’t have much money knowledge, they’re probably using a bank account without adult help or supervision for the first time in their lives.

These bank account probably have debit cards.

Maybe the accounts hold funds from the student’s job. Perhaps the account houses spending money or an allowance deposited by parents.

Or maybe the account is a parking place for big cash from student loans and other funds earmarked for tuition bills.

These young adults are the perfect victims for a new kind of scam, and the bank accounts of inexperienced or uneducated people are a veritable jackpot for scammers.

In short, for this scam, the thief, who often poses as a fellow student, asks the student for help.??????????????????

The scammer says he has a check he needs to cash, but he doesn’t have a bank account. He then asks the student to deposit the check for him and give him the money. In return, the student gets to keep a little of the money as a “thank you.”

But of course the check is a phony, and in a couple of days, it will bounce or be identified as fraudulent. The owner of the bank account — the student — will be responsible for whatever money was withdrawn against the value of the check.

And he’ll be out a lot of money.

The hucksters target their prey in several ways.

Some do it on social media. Others do it at parties or other gatherings on campus.

Some scammers will prey on their victim’s emotions.

They’ll tell a sad tale of needing to get home to visit their mom in the hospital, who was the victim of an accident or was suddenly diagnosed with a fatal illness.

The scammer says he has the money he needs to get home, but he can’t get his hands on it. He has funds in his bank account, the scammer says, but the account was hacked the week before. He can’t access his account while the bank and the authorities investigate what happened, he tells the student.

It’s awful, the scammer says. He even has a check in hand for hundreds or thousands of dollars, right there in his hands, but he can’t cash it because his account is temporarily frozen.

So, the scammer asks, “Would you deposit this check for me and take out the cash? And you can keep some of the money for your trouble.”

Some thieves take it a step further. Instead of asking the student to make the deposit, the scammer asks for the student’s debit card and PIN, offering to make the deposit himself.

That would give the scammer access to funds not only from the soon-to-bounce check, but whatever other money is in the account.

The scammer then takes out as much money as possible from ATMs, and then even goes shopping, using the debit card for point-of-sale purchases at retailers until the money runs out or until the student realizes what’s happening and calls authorities.

Instead of playing the hard luck case, other scammers play on greed and the lure of easy money, bringing the student into the fold. They’ll run the same scam, but instead of a sick mom, the scammer will tell a version of the truth.

He’ll actually let the student in on the crime. He’ll tell the student the check is a fake, and propose to split the proceeds with the student. The scammer says after he gets the money, the student should report his ATM card stolen, so this way the student won’t be responsible for the money.

If the student goes for it, at best, the student is out the money.

At worst, the student could end up both out the money and arrested.

“It’s illegal to use your card or let someone else use it to defraud the bank. You will get charged with a felony,” said Greg Kliemisch, spokesman for the U.S. Postal Inspection Service. “A scammer is a scammer so it’s highly unlikely you’ll get paid.”

And then, the student’s credit will have been compromised, which will make it difficult to obtain credit when needed, he said.

Card cracking was a pretty widespread problem in the Chicago area, where last fall, 29 people were arrested in Illinois and Indiana in a scheme the Federal Bureau of Investigation (FBI) said cost banks millions of dollars since at least 2011.

The FBI said the alleged scammers deposited counterfeit checks into bank accounts owned by third parties, and then they used ATMs and point-of-sale purchases to access the money.

The Better Business Bureau also offers warnings about these scams, saying college students are targeted because the scammers think they can be easily duped.

To keep accounts safe, the BBB recommends students never lend out their debit cards
“because only bad things can happen when you do.” It also tells students to keep passwords and PINs private at all times, and to never use auto-fill passwords on mobile devices or computers.

“Parents should ensure that children who have debit cards safeguard them and never give them to anyone for use or disclose the PIN,” Kliemisch said.

You, as a parent, can educate your student about these scams. Use this column as a starting point.

Armed with this knowledge, your student can protect himself if he’s ever approached by someone pitching this scheme. Your student can direct the check-holder to the nearest check-cashing joint, and then report it to the authorities.

Postal inspectors say if you believe that you’re a victim of this scam, you should call (877) 876-2455 or visit its web site.

Have you been Bamboozled? Reach Karin Price Mueller at Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of

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