What are micro-deposits used for?
Micro-deposits are legitimate test transactions comprising very small amounts, typically between $0.01 and $0.99. Financial institutions or service providers may initiate micro-deposits, often in pairs, to verify that a linked bank account is valid and can accept payments or withdrawals.
For example, if you link your primary checking account to a savings account at another bank, that bank may send micro-deposits to your checking account. Once you receive them, you’ll be asked to verify them with the sender to confirm the link.
How does a micro-deposit scam work?
Like many financial scams, micro-deposit scams exploit the communication and verification processes between banks and account holders, turning legitimate systems into an opportunity for fraud. Micro-deposit scams are especially effective because they often go unnoticed by account users, security protocols, and even law enforcement. Scammers face low risk since banks may reimburse small, unauthorized deposits. However, when these scams target many accounts, the financial impact can be significant.
One example of a micro-deposit scam involves fraudsters using a stolen debit or credit card to make small deposits. When these deposits go unnoticed by an account holder, the scammer initiates large, unauthorized withdrawals until they’re caught. In more complex schemes, fraudsters may get victims to verify micro-deposits by posing as a legitimate bank representative.
Scammers may also use micro-deposit scams to move large amounts of money. As part of a micro-laundering scheme, a scammer may “clean” stolen funds, or cover their tracks, by making micro-deposits across numerous accounts. Fraudsters are often caught because they initiate an unusually high number of small transactions in a short period, such as multiple low-dollar purchases from specific e-commerce sites or numerous microtransactions through payment platforms or money transmitters.
Ways to protect yourself from micro-deposit scams.
If you receive any micro-deposits from an unauthorized source, report them to your bank immediately. Avoid verifying these transactions, even when you’re prompted to do so by different communications. Avoid clicking suspicious links in your communications, as they may contain embedded malware that can access your accounts without your authorization.
Once you’ve notified Popular Direct of these fraudulent micro-deposits, file a report of the incident with the Federal Trade Commission. Outline any details that may be relevant, including the micro-deposit amounts or suspicious communications you may have received.
Mind your pennies and quarters to avoid micro-deposit scams.
Micro-deposit scams are a sneaky way to gain access to your bank account, funds, and sensitive personal information. The strategies you use to protect yourself against micro-deposit scams can also help safeguard your account against other financial scams.
If you’ve been a victim of a micro-deposit scam or a bank account takeover, or notice any other unusual account activity, immediately contact the customer care team at Popular Direct. We’ll help ensure that your account is safe and secure.
