Banks and financial regulators continue to warn customers about phishing messages, impersonation schemes, fraudulent investment offers and other methods designed to persuade people to surrender account credentials or authorize transactions themselves.

The risk is not limited to sophisticated hacking. Many financial scams depend on social engineering, in which criminals manipulate victims into believing that a request is legitimate.

That makes basic verification practices an important part of protecting digital bank accounts.

Be suspicious of unexpected requests

One of the most common warning signs is an unsolicited request involving money or account information.

A message may claim that a bank account has been compromised, a payment needs to be verified or an unusual transaction requires immediate action.

The urgency is often deliberate.

Fraudsters want potential victims to react before they have time to examine the request carefully.

The Federal Trade Commission advises consumers not to click unexpected links or provide personal or financial information in response to unsolicited messages.

Instead, customers should contact their bank through a telephone number, website or mobile application they already know to be genuine.

Never give away authentication information

Banking credentials can provide direct access to money, while additional authentication information can help criminals bypass security protections.

Consumers should not share passwords, one-time verification codes, PINs or other authentication information with someone who contacts them unexpectedly.

A person claiming to represent a bank may already know some personal information about the customer. That does not establish that the caller or message is genuine.

The safest approach is to end the communication and independently contact the institution.

Check the destination before transferring money

Digital payments can be completed within seconds, which makes it particularly important to verify where money is going before approving a transaction.

Consumers should check account numbers, recipient names and payment details carefully.

A familiar-looking name is not necessarily sufficient evidence that the recipient is legitimate.

The same principle applies to investment opportunities, online purchases and requests for emergency payments.

If someone creates pressure by insisting that a transfer must happen immediately, that pressure itself should be treated as a warning sign.

Keep devices and banking applications updated

Account security also depends on the devices used to access financial services.

Software updates frequently include security fixes, while outdated operating systems and applications can leave known vulnerabilities unaddressed.

Consumers should use official application stores when installing banking applications and avoid downloading financial software from links supplied through unsolicited messages.

Device security measures such as screen locks and biometric authentication can provide additional protection if a phone or computer is lost.

Turn on transaction alerts

Banking alerts can provide an early indication that an account has been accessed or a transaction has been initiated.

Depending on the bank, customers may be able to receive notifications for card purchases, transfers, withdrawals or other account activity.

These alerts do not prevent every fraudulent transaction, but they can shorten the time between an unauthorized payment and its discovery.

That matters because reporting a suspicious transaction quickly can give the financial institution a better opportunity to investigate and determine what action may be available.

Verify before approving a payment

Some modern scams do not require criminals to bypass a bank’s security system.

Instead, they persuade the customer to approve the transaction.

This can make fraudulent payments appear to the bank as authorized activity even though the customer was manipulated into making the payment.

Consumers should therefore treat unexpected authentication prompts as something to investigate rather than automatically approve.

If an authentication request appears when no transaction has been initiated, the customer should contact the financial institution using an official channel.

Be careful with investment offers

Digital platforms have also made it easier for fraudsters to promote fake investments.

Promises of unusually high or guaranteed returns, pressure to invest immediately and requests to send money to unfamiliar accounts are common warning signs.

The U.S. Securities and Exchange Commission and other regulators have repeatedly warned investors about fraudulent investment schemes promoted through online platforms and social media.

Consumers should independently research an investment and verify the identity and regulatory status of the person or company offering it before transferring funds.

What to do if money has already been sent

Acting quickly is important if a person realizes that they have been deceived.

The customer should contact the bank or payment provider immediately, explain that the transaction may be fraudulent and ask what recovery or cancellation options are available.

Passwords should also be changed if account credentials were exposed.

If the scam involved identity information, the victim may need to take additional steps to protect affected accounts and report the incident to the relevant authorities.

Keeping records of messages, payment information, telephone numbers and other evidence can also help investigators and financial institutions understand what happened.

Security starts with slowing down

Digital banking itself is not the problem.

The technology allows consumers to manage money efficiently and gives financial institutions sophisticated tools for detecting suspicious activity.

But fraudsters increasingly exploit the human side of financial security.

A convincing message, a fake customer-service representative or an urgent payment request can cause a person to bypass otherwise effective security controls.

The most useful protection is often simple: stop, verify and then act.

Consumers who receive an unexpected request involving money or account information should avoid responding through the communication channel provided by the sender.

Instead, they should independently contact the bank or financial institution and confirm whether the request is legitimate.

In an increasingly digital financial system, that extra pause can be one of the most valuable security measures a customer has.

Reporting Credit: U.S. Federal Trade Commission — consumer fraud and phishing guidance; U.S. Securities and Exchange Commission — investor-fraud warnings and investor protection guidance; Consumer Financial Protection Bureau — consumer financial fraud and banking guidance.

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Allegations Against Zelle

The lawsuit, filed in New York state court, claims that Zelle, owned by a consortium of U.S. banks through Early Warning Services, did not include essential safety features to prevent fraud. According to James’ office, the platform’s lack of verification processes allowed scammers to access accounts or trick users into transferring money to fraudulent accounts posing as legitimate businesses.

“No one should be left to fend for themselves after falling victim to a scam,” James said. “I look forward to getting justice for the New Yorkers who suffered because of Zelle’s security failures.”

Federal Case Dropped

Earlier this year, the Consumer Financial Protection Bureau had initiated a similar case against Zelle. However, the agency dropped the lawsuit after President Donald Trump dismissed the CFPB director, paused agency operations, and moved to fire key staff members.

James’ office noted that her decision to proceed with the lawsuit was influenced by the CFPB’s abandonment of the case following the change in federal administration.

Real-World Examples of Fraud

The lawsuit cites multiple instances of users being defrauded through Zelle. In one example, a New York resident received a phone call from someone claiming to be an employee of the utility company Con Edison. The caller falsely warned that the user’s electricity would be shut off unless payment was made via Zelle. The victim transferred $1,500 to a Zelle account named “Coned Billing” and later discovered it was a scam. Attempts to recover the funds through the bank were unsuccessful, according to James’ office.

James’ allegations focus on the platform’s insufficient fraud protections and inadequate verification measures, which she argues left consumers vulnerable.

Zelle’s Response

Through a spokesperson, Zelle dismissed the lawsuit, calling it “a political stunt to generate press, not progress.”

“The Attorney General should focus on the hard facts, stopping criminal activity and adherence to the law, not overreach and meritless claims,” the statement said.

Context and Political Implications

Attorney General Letitia James has previously been a frequent legal adversary of former President Trump, filing multiple lawsuits against him over the years. Recent reports from The Associated Press indicate that the Justice Department has subpoenaed James as part of an investigation into whether she violated civil rights in her previous actions.

While the political dynamics may add context, the current lawsuit primarily centers on consumer protection and alleged failures in Zelle’s fraud prevention mechanisms.

Importance of Consumer Protection in Digital Payments

Zelle enables near-instant money transfers between users, making it a convenient platform but also a target for scammers. Critics argue that digital payment services must implement robust security measures to prevent fraud, including identity verification, transaction alerts, and dispute resolution processes.

James’ lawsuit emphasizes the responsibility of payment providers to safeguard user funds and to ensure that customers are not left unprotected when fraud occurs. The case may set a precedent for how digital payment platforms manage security and accountability in the United States.

Potential Impact on Users and the Financial Industry

If successful, the lawsuit could result in stricter regulations for Zelle and similar services, potentially requiring banks and payment platforms to adopt enhanced fraud prevention tools. Consumer advocates have long argued that current protections are inadequate, leaving users exposed to sophisticated scams.

Meanwhile, the banking consortium that owns Early Warning Services may need to address both technological and policy shortcomings, including improved verification protocols and more transparent procedures for recovering funds lost to fraud.

Conclusion

The New York Attorney General’s lawsuit against Early Warning Services underscores ongoing concerns about security in digital payments. By targeting Zelle’s alleged failures, the case highlights the growing importance of protecting consumers from scams in fast-moving financial transactions. The outcome could influence not only Zelle’s operations but also broader standards for online payment platforms in the United States.

Source: AP News – NY attorney general sues Zelle’s parent company after Trump administration drops similar case

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Written July 29, 2025 – 14:00 EDT

The FBI has issued a renewed warning to iPhone and Android users across the United States, advising them to avoid responding to suspicious text messages—even those that seem to come from friends or familiar companies. According to a recent public service advisory, cybercriminals are exploiting text-based two-factor authentication (2FA) to hijack personal accounts, steal identities, and defraud individuals.

With billions of scam texts circulating annually in the U.S., federal authorities say Americans must remain vigilant and adopt stronger digital security habits to avoid falling victim to these increasingly sophisticated attacks.

Rise of scam texts targeting personal accounts

The FBI’s alert focuses on the growing use of fraudulent text messages and voice calls—also known as smishing (SMS phishing) and vishing (voice phishing)—to trick users into giving away sensitive information such as login credentials, financial data, or temporary security codes.

Common scam text examples include fake messages about:

• Undelivered packages
• DMV penalties or unpaid tolls
• Suspicious bank activity or Amazon refunds

These messages often impersonate trusted institutions and urge users to click a link or reply urgently. Once a victim engages, attackers use social engineering techniques to gain access to personal information or send malicious links that install spyware.

In its most recent advisory, the FBI emphasized that users should never respond to text messages or emails unless they can verify the sender’s identity. Even if a message appears to come from a friend, coworker, or family member, it may be the result of a compromised account.

Why sharing 2FA codes is dangerous—even with people you know

Two-factor authentication (2FA) is widely used as an added layer of protection for online accounts. It typically requires a user to enter a one-time passcode (OTP) sent via SMS or email after entering their password. While 2FA is strongly encouraged, text-based OTPs are also one of the weakest links in digital security when misused.

According to the FBI, threat actors can manipulate users into forwarding 2FA codes, even when those users have followed standard security practices. For example, if a criminal gains access to a person’s messaging account, they might impersonate that person and ask their contacts to forward an authentication code.

“Actors may use social engineering techniques to convince you to disclose a 2FA code,” the bureau stated. “Doing so lets attackers compromise and take over accounts.”

Cybersecurity expert Jake Moore of ESET echoes the FBI’s concerns:

“Scammers often trick people into revealing OTPs to bypass security checks and take control. Even if someone claims to be from your bank, a trusted company, or even a family member, keep OTPs to yourself.”

This type of scam is especially dangerous because it preys on human trust—users are more likely to send a code if they believe the request is coming from someone they know.

Better alternatives: Authenticator apps and passkeys

To improve digital security, both the FBI and industry experts recommend using authenticator apps or passkeys instead of relying on SMS-based codes.

Authenticator apps (like Google Authenticator, Microsoft Authenticator, or Authy) generate time-sensitive codes on the device itself, meaning they are not sent through SMS and cannot be intercepted or forwarded.

Passkeys go even further. They link an account directly to a user’s physical device (such as a phone or laptop) using biometric data or a secure hardware token, making them significantly harder to steal or spoof.

Many tech companies, including Apple, Google, Microsoft, and major financial institutions, have already implemented passkey support across their platforms. Meanwhile, banks in countries like Australia and the United Arab Emirates are phasing out SMS-based 2FA entirely in favor of more secure authentication tools.

How to protect yourself from 2FA scams

If you still rely on SMS codes for two-factor authentication, it’s crucial to understand the risks and take the following precautions:

• Never share your 2FA or OTP code with anyone, no matter who is asking.
• Avoid clicking on links in unsolicited text messages or emails.
• Verify the sender by contacting the institution directly through their official website or phone number.
• Enable 2FA on all your accounts—preferably using an authenticator app rather than SMS.
• Use unique, strong passwords and consider a reputable password manager.
• Regularly check account activity for any unusual logins or changes.

By making small changes to your digital habits, you can significantly reduce your vulnerability to scams and protect your personal accounts from compromise.

Final thoughts

The FBI’s warning serves as a crucial reminder that while digital tools like 2FA are designed to protect users, they must be used correctly and cautiously. The real danger lies not in the technology itself, but in the ability of cybercriminals to manipulate people into bypassing their own safeguards.

As cybercrime continues to evolve, so must our approach to security. Upgrading from text-based authentication to more secure methods like authenticator apps or passkeys is not just advisable—it’s essential.

Source: Forbes – FBI Warns iPhone And Android Users—Do Not Share These Texts

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Meta has removed over 2 million accounts this year related to “pig-butchering” scams, a type of fraudulent scheme that often leads to victims losing their life savings through fake online friendships and cryptocurrency investments.

These scams are complex and can unfold over several months. Scammers begin by establishing an online friendship or romantic relationship, slowly convincing the victim to invest in fake cryptocurrency opportunities. Many victims, believing they’ve found a legitimate way to get rich, end up giving away large sums of money before realizing they’ve been deceived.

Meta has taken significant steps to address this issue, including deploying dedicated teams to identify scam operations, sharing data with international law enforcement, and taking down millions of scam-related accounts. These measures are part of a broader effort by major tech companies to tackle pig-butchering scams, which have cost Americans billions of dollars annually.

Scammers often use a range of platforms to target victims, including dating apps, Facebook, Instagram, and WhatsApp. A common strategy is to lure victims onto Telegram, an app that is less moderated and often reluctant to cooperate with international authorities. Telegram has recently updated its terms of service to indicate it may cooperate with law enforcement, following the arrest of its owner in France in August.

Pig-butchering scams are a growing problem. In September, the FBI reported that victims had lost nearly $4 billion to crypto-related scams, most of which fall under the pig-butchering category. This number likely underrepresents the true scale of the issue, as many victims do not report the fraud.

To combat this, Meta will now automatically flag potential scam messages when strangers message users on Facebook Messenger, Instagram DMs, or WhatsApp groups. This move is part of a broader recognition among tech companies of the severity of pig-butchering scams.

In one case, Meta recently took down a network of scam accounts linked to a compound in Cambodia. The scammers had been using ChatGPT to translate their messages and generate social media posts to trick victims. Meta was alerted to this operation by OpenAI.

Earlier this year, Meta, Tinder, Hinge owner Match Group, and several cryptocurrency companies formed the Tech Against Scams coalition. This group pledged to share information about scammers and educate users on how to avoid falling victim to such schemes. Jeff Lunglhofer, CIO of Coinbase, emphasized that collaborating with other tech companies and sharing data is crucial to effectively combatting scams.

However, some experts believe tech companies are not doing enough. Jake Sims, co-founder of Operation Shamrock, a global coalition fighting scams, argued that the current response is too reactive and insufficient to address the scale of the problem. He pointed out that despite Meta’s awareness of pig-butchering scams for years, the situation continues to worsen.

In conclusion, while Meta and other tech companies have taken steps to combat pig-butchering scams, the issue remains a significant challenge, requiring more proactive measures and industry-wide collaboration to protect users from these deceptive and harmful schemes.

Source

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