A local resident was caught up in a lotto scam. (She requested that we did not use her name, so we will call her Anna.) Many are familiar with scams and feel sorry for the victims. However, few know of the secondary impacts of scams. How certain businesses can make matters worse and expose victims to further harms by scammers.
This is the story of how Third Federal Bank reacts when one of their customers becomes a victim of a scam.
Things went from bad to worse when Anna reported the scam to her bank. After banking with Third Federal for 60 years, Third Federal Bank listened to her story. The bank moved money from a CD account Anna owned to ensure they suffered no loss from the event. After moving her funds, they abruptly closed her accounts, kicked her out of their bank, and blacklisted her. The bank’s action not only keeps her from banking with them but prevents other banks from opening accounts for her.
Anna had enough in her account to cover the loss, but the bank was afraid that if she was scammed once, it could happen again.
What was the scam? It all started when Anna decided to apply for some online sweepstakes. She applied to a few of them and was notified by email that she won! A cashier’s check was mailed, which she promptly deposited.
Anna was told to pay the tax on her winnings. The instructions- mail $3,500 to pay the tax. She did what she was told and sent what she thought was a tax payment.
A few days later, Anna’s bank received notice that the check Anna deposited did not clear. It withdrew the winnings from her account. (It can take weeks for a bank to learn that there is a problem with a check.) When the check bounced, Anna realized she had been scammed. She notified Third Federal; a mistake that was worse than the scam itself. This was when Third Federal closed her accounts and blacklisted her.
It is true that other banks do close accounts because a customer was scammed, but this is often done because the customer was scammed multiple times or if it is a new account.
Not having a bank account might not seem like a big deal, but it is. People without a bank account must pay hefty fees to cash their retirement checks and then they must purchase money orders to pay bills. If they are sick and can’t get to the check-cashing store, they can’t pay their bills and late fees pile up.
Scammers know banks close accounts of people who have been scammed. They often run a second scam by calling the same person promising to fix their banking troubles for a fee. They then take the person’s money twice.
Anna is now watching out for scams but also feels Third Federal Bank’s betrayal was worse than the scam.
