We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is Bank Fraud?

By Adam Hill
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Bank fraud refers to the use of deliberate misrepresentation in order to fraudulently obtain money or other assets that are held by a bank or similar institution. It is distinct from simple bank robbery or theft, because the perpetrator usually commits the fraud in secret, hoping that it will not be noticed until he has had ample time to move on. It usually requires some sort of technical expertise as well. For reasons like this, bank fraud is one of the offenses referred to as white-collar crime.

In most areas of the world, all types of bank fraud are illegal. One of the more prominent types of fraud is known as identity theft, where one person uses another person's private identifying information to obtain money, usually in the form of loans or credit. Somewhat related to identity theft is identity fraud, where credit is obtained by the use of an entirely fictitious identity. While identity theft and similar crimes receive a great deal of publicity, they are far from the only crimes involving bank fraud.

Fraud involving checks is quite common as well. Forging checks or signatures on them, as well as altering checks that have already been written are two ways in which check fraud is committed. In the case of the latter, it may be as simple as adding a few strokes of a pen to turn a check for $100 US Dollars (USD) into one for $1,000 USD. Another common type of fraud is check kiting. This is any kind of fraud that takes advantage of the fact that funds can be drawn on a deposited check before the money is actually removed from the check writer's account.

Check fraud has a history as long as that of checks themselves. Over the years, security features have been incorporated into many types of checks, especially payroll checks. These include unique watermarks, heat-sensitive ink, and extremely fine printed lettering that is not easily noticed or counterfeited. Technology has placed many barriers in the way of those who would perpetrate bank fraud, but not all fraud can be completely prevented.

One kind of bank fraud that is still hard to detect or stop in time is that which is committed by bank employees themselves. In many cases, these acts are only discovered by careful auditing of the bank's accounting records, months down the road, by which time it is too late to recover lost funds. A complete description of the many possible ways to commit bank fraud would be impossible, but suffice it to say that criminals have gone to great lengths and used remarkable creativity in finding new and different ways to steal and defraud.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

By anon926473 — On Jan 19, 2014

Why does my bank, the Bank of the Philippine Islands not acknowledge their fault when in fact, something was done by their employees? Where do I report a dishonest bank if our Central Bank is adamant in helping me? Where is justice and restitution? The checks were fabricated and do not belong to my check series.

By anon266460 — On May 06, 2012

A depositor withdrew the amount stated in his passbook. The teller later told the depositor after almost three hours, that the latter overpaid the amount withdrawn, alleging that the former committed an inadvertent and honest mistake. The depositor denied it and the bank filed a complaint for estafa. What is the remedy for the depositor, considering that he swore that he only received the amount stated in his passbook and the figures stated on his withdrawal slips?

By anon173108 — On May 05, 2011

i recently set up an automatic transfer from my savings account to my checking account for $7000, thinking the money would be there at the time of the transfer. Unfortunately it wasn't but the transfer happened anyway, showing no negative balance and making it appear as if the funds were available.

So not knowing any better, I spent the money. My bank called me to tell me they are closing my account. Not really upset about that since I'm getting ready to file bankruptcy anyway. However, can this be taken as a form of fraud?

By anon162084 — On Mar 22, 2011

it is a fraud if the bank opens more than one account for a customer and this customer only uses one account.

By anon77393 — On Apr 14, 2010

For the first question i think it is a form of fraud. It's a common misunderstanding when one opens up several bank accounts in your name and you know about it, yet you continuously used the money. I'd report it to your bank and clear up the mix up immediately.

For the second anonymous question. i think if it is in a form it isn't, because he gave you consent to sign it, so since he said that he is at fault.

If the divorce hasn't taken affect yet then you should be fine other than that i don't know.

By anon51382 — On Nov 05, 2009

someone opened several bank accounts under my name and i used some of the money. is this fraud?

By anon46267 — On Sep 23, 2009

If your husband gives you permission to sign a check to help clear up a lot of finances, .even though you are divorcing and you sign his name and cash it and pay all the bill, lights, food etc., is that considered fraud and to what extent?

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.