The Financial Crimes Enforcement Network (FinCen) recently issued an alert to banks and financial institutions regarding tax and financial fraud associated with the use of counterfeit U.S. passport cards.
A passport card operates similarly to a passport book by verifying identity and proof of U.S. citizenship. As the name implies, it is a wallet-size plastic card with no pages. A passport card is less expensive than a passport book but is limited in use to travel to Mexico, Canada, and Caribbean countries. The card cannot be used for international travel.
The U.S. Department of State’s Diplomatic Security Service (DSS) reports there has been an increase in fraud using the cards since 2018. Used by individual bad actors and fraud rings, an imposter presents a passport card that reflects the information of the actual victim. Overall, this type of fraud has caused approximately $10 million in actual losses and $8 million in attempted thefts. More than 4,000 people have been impacted by these impersonators.
FinCen notes passport cards are being counterfeited and used at the bank that the victim frequents—usually not the specific branch commonly used by the individual. Often working in pairs, a “money mule” identifies themselves as the victim, and often wears an earpiece through which they are provided additional identifying information during a transaction. The money mule may request an account balance and withdrawal limits. The passport card is provided as a primary ID, but additional counterfeit identification is presented upon request.
Money is often requested as a wire transfer, cashier check, or money order. A new joint account is usually established with the original ID which names the bad actor as a joint owner. The remaining funds are then transferred into the joint account and quickly transferred out of the account by wire. The bottom line–all account funds are depleted. The fraudsters then repeat the same action with another passport card, a different victim, and a different bank.
Personal contact information acquired through data breach, hack, or on the dark web provides the opportunity for this type of identity theft. FinCen offers banks some tips on identifying fraudulent passport cards, including:
- A fake passport card may be blurred or in color. Legitimate passport cards are crisp, clear, and grayscale.
- Some information on a real passport card is raised on the plastic card. Fake cards are flat. The U.S. Department of State holograph may be faked or missing altogether.
- The signature on the passport card does not match the signature card on file with the bank.
This scheme is an easy way to lose a lot of money fast. The FinCen alert provides a long list of other red flags that signal fraudulent activity. If concerned, speak with your bank about the steps they take to verify your identity and avoid passport card fraud.
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