Avoid Online Bank Robberies
FDIC site warns consumers about potentially fraudulent banks soliciting deposits
via the Internet - By Michael Abramowitz, theWhiz.com
The pop song by Darryl Hall and John Oates that intones "private eyes
are watching" may now be applied to your bank. So who's watching? Try the Federal
Deposit Insurance Commission. The FDIC launched the Suspicious Internet Banking Web in
June 1998 to counteract Internet bank fraud.
Sound scary? A little Big Brotherish?
 Christine Heady of theWhiz.com
tells how to avoid online bank fraud. Get
RealPlayer. |
Don't worry, it's there to help you. Previously, bank chief executives were the
only ones with access to FDIC information on fraudulent financial practices. Now this
information is in the public domain. The site addresses FDIC concerns about the number of
crooks soliciting over-the-Net deposits that are neither legally chartered nor FDIC
insured.
A special alert from FDIC news
Special alerts warn consumers about potentially fraudulent banks practicing
online and off. The FDIC tells the public to steer clear of the following self-proclaimed
Internet banks: Excelsior Bank/The Excelsior Bank International Corp.; Focus International
Ltd.;
| Online warning signs: No
FDIC logo
Suspicious bank name
Ridiculously high interest rates |
Dunbar National Bank of Maryland; Netware International Bank; The Freedom Star
National Bank of Arizona; and European Union Bank. All of these companies are accused of
soliciting assets over the Net without FDIC charter or insurance-- a violation of the law.
"To see if in fact a bank is legitimately chartered, the public now has
access to immediate FDIC information," said John Jackwood, special assistant to the
director for the division of compliance and consumer affairs.
You can use the website to search the FDIC's database of officially chartered
and insured institutions. The site will also identify legitimate state-chartered banks,
national banks licensed with the Office of the Comptroller of the Currency, and federal
banks registered with the Office of Thrift Supervision.
"This is definitely good for the industry because the banking industry is
built on trust," said John Hall, American Bankers Association spokesman in
Washington, D.C. "It's even more important for Internet banking."
What to Do If You Suspect Fraud
Here are some things to watch for when banking on the Web, according to Jackson:
Look for the official advertising statement "Member FDIC." A bank is
required by law to display the FDIC logo if it is advertising for deposits. Obviously,
scam artists can copy the FDIC logo, but if they do, they put themselves in more trouble
with the law, Jackwood said.
Scrutinize the bank's name. Be wary of banks with slightly different spellings
or similar names to legitimate banks. For example, one alleged fraudulent bank listed on
the FDIC alert is Midland Credit & Guarantee Bank, a name that can be easily confused
with legitimate FDIC member Marine Midland National Bank.
Be wary of ridiculously high interest rates. One recent scam promised its
victims 20 percent interest rates on deposit and savings. If it's too good to be true, it
probably isn't true. Banks haven't offered rates like that in more than 10 years,
especially with the 30-year bond currently hovering around 5.5 percent.
Here's what to do if you suspect an unlicensed bank of Internet fraud:
Obtain the name of the institution, and its URL.
Record the dates you accessed its website.
Keep track of any mail, email, or phone contacts.
Record the name of the person representing the company (if known).
You can access a complaint form on the FDIC site. The government's banking
watchdog will use the Department of Justice and the FBI as the enforcement for its
website.
If you want to make a complaint about an company that is legally chartered, the
FDIC says don't use the Suspicious Internet Banking site. Instead, it asks that you
contact the FDIC at (800) 934-3342.
Copyright 1999, theWhiz.com,
an online publication of Intelligent Life Corp. All rights reserved.
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