Do you know that your employee’s paychecks can be stolen without your knowledge? It sounds like a nightmare, but it is a very real threat. Every month, businesses nationwide fall victim to this direct deposit scam (otherwise known as direct deposit diversion fraud) and lose their hard-earn money. This type of fraud is when a cybercriminal steals employee information, such as name and email address, and then uses that information to change the destination of their direct deposit from the legitimate account to an account in the criminal’s name. On payday, businesses think they are paying their employees but instead are unknowingly paying criminals. It’s not as difficult as you might think. For a security breach, all the criminal needs is employee information and access to a company’s payroll system. This information can be easily obtained from the company website, emails, or by looking the person up on social media and checking their Facebook page or LinkedIn profile. Then the criminal phishes by pretending to be an employee and sending a request to change their direct deposit bank account. Once the account is changed, the money is transferred to the criminal’s account and it is virtually impossible for businesses to get their money back. Here are examples of real emails that our company received from scammers, posing as employees: The best way to protect your business is to ensure that all requests for direct deposit changes are legitimate. Unless the employee hands you a direct deposit bank account change in person, you must go the extra mile and make a phone call and speak with your employee, every time, to verify that the request you received by email is real. This may seem like a hassle, but it is much easier than dealing with the repercussions of unwittingly paying thieves. It’s important to remember that you and your employees are not powerless against direct deposit fraud. By taking the necessary precautions and properly verifying all requests for direct deposit changes, you can significantly reduce your risk of becoming a victim of this type of fraud. At the end of the day, it’s up to you to protect your business and your employees from direct deposit fraud. Taking a few extra steps to verify requests for direct deposit changes will help ensure that paychecks are going where they should—straight into the hands of your employees. Are You Paying Too Much? Send us your payroll invoice and get a FREE 10 min call to see if you’re getting ripped off. How Much Does It Cost? See detailed pricing now for each service without talking to a salesperson. If you found this article helpful, here are some others you might like:So, What is Direct Deposit Diversion Fraud?
How Does this Happen?
How Can You Protect Your Business?
FAQs
Can someone scam you with your direct deposit? ›
Direct deposit scams are on the rise, with bad actors attempting to redirect employees' paychecks into their own accounts through various deceptive tactics, such as phishing emails or compromised employee accounts. Let's take a closer look at how these scams work and what you can do to avoid them.
How does a deposit scam work? ›Fake Check Scheme.
The scammer sends a fake check to the victim, usually in an overpayment scenario, such as for an item sold online. The victim is instructed to deposit the check and send back the excess funds. By the time the check bounces, the scammer has vanished with the victim's money.
Hackers may gain access to an individual's online banking credentials through data breaches or malware attacks, enabling them to change direct deposit information and redirect funds to their own accounts.
Is direct deposit redirect a scam? ›Once the phishing email is received, the employee is then directed to a false site impersonating the self-service portal for direct deposit. The thieves then use the stolen login credentials to change the direct deposit instructions to their own account which provides them access to the employee's payroll account.
What is the new payroll scam? ›In a recent wave of payroll diversion scams, cybercriminals will impersonate your employee and email your payroll manager to update their bank account information for payroll direct deposit. The email may come from a legitimate company email that has been compromised or a fake email that appears to be authentic.
Can a scammer set up a Direct Debit with my bank details? ›In some cases, a signature isn't required. So, essentially, it is possible for somebody to set up a fraudulent Direct Debit in your name without permission.
Can your bank account be hacked by depositing a check? ›But in some cases, a savvy hacker with both your routing and account number on a check can impersonate you and potentially take money from your account without permission.
Do banks pay back scammed money? ›Depending on the amount of stolen money, the type of scam, and the time it took to report it, banks can reimburse (or recover) your lost money.
Can someone steal your bank details through a mobile check deposit? ›There are several ways that criminals employ remote deposit capture scams. The most common way is stealing account holders' personal or account information or tricking them into providing it with social engineering (Opens in a new Window).
Can someone steal my paycheck? ›Do you know that your employee's paychecks can be stolen without your knowledge? It sounds like a nightmare, but it is a very real threat. Every month, businesses nationwide fall victim to this direct deposit scam (otherwise known as direct deposit diversion fraud) and lose their hard-earn money.
What information does a scammer need to access my bank account? ›
The easiest way to become a victim of a bank scam is to share your banking info — e.g., account numbers, PIN codes, social security number — with someone you don't know well and trust. If someone asks for sensitive banking details, proceed with caution.
Can people do anything with your direct deposit info? ›No. When you enrol in direct deposit, you don't authorize the payor to withdraw money from your bank account. The information you provide can only be used to deposit money into your account.
Is there a risk with direct deposit? ›One key risk associated with direct deposits is cybersecurity. Because payments are carried out electronically or online, they are susceptible to possible cybercrimes. However, banks and other financial institutions take measures to ensure safety and data protection at all times.
Can a direct deposit be stolen? ›Direct deposit scams and fraud are on the rise! We all must do our part to ensure that employee direct deposits are not sent to scammers. Fraudsters are using publicly available information like social media to target employers, HR staff and employees in an attempt to steal their direct deposits.
What is a con of getting paid via direct deposit? ›Cons of Direct Deposit
These days, direct deposit fees can cost you anywhere from $50-$149 depending on the size of your business. Some banks even charge ongoing monthly fees. This is something you'll want to look into at your bank before set-up because that money really mounts up over time.
RE: Direct Deposit into another person's account
In my experience, the bank will kick the transaction back if the employee is NOT on the account, regardless if there is a letter or not. The employee must be on the account that the transaction is going to.
In a fake check scam, a person you don't know asks you to deposit a check. It's usually for more than they owe you, and it's sometimes for several thousand dollars. They tell you to send some of the money back to them or to another person.