As summer comes to an end, and we are reconciling our bills from summer vacation or beginning to plan for back-to-school purchases, many of us could use a financial boost. The thought of discovering a “secret” account to pay our bills may be alluring. Imagine learning that there is an account to which you have unknowingly been contributing through payroll deductions. Seems too good to be true? Unfortunately, it probably is, but consumers are reporting that they are falling for the pitch.
Fraud.org has seen a growing number of reports about consumers being scammed into believing that they have a secret bank account at the Federal Reserve that they can use to pay off bills or other debts.
It’s not true--and consumers who are falling for it will find themselves in deeper trouble with the debts they owe. Some consumers may also expose themselves to identity theft or end up facing criminal charges for bank fraud.
The Federal Reserve “secret” account scam typically works like this:
Scammers have set up videos on YouTube that look like public service announcements meant to educate consumers about these secret accounts. These videos walk the consumer through the “process” of looking up their Federal Reserve routing number (which in reality doesn’t exist) and how to make authorized withdrawals. The con artists behind the videos are smart; the videos look legitimate, and the money transfer may even appear to consumers to go through. However, after the bank has time to review the transfer, it will surely cancel it, and victims of the con may face a slew of fees from their financial institution, and/or the merchant they attempted to pay through the Federal Reserve account.
Alternatively, scammers may choose to reach out to individual consumers via email, phone, and social media. As in the video version of this fraud, the scammer explains to the consumer that the Federal Reserve has a secret account in the his or her name that can be accessed to pay bills or other expenses. However, in this variation, the scammer will require their victims to provide their Social Security number, bank account routing information, or other personal information to “look up” their secret account number. Once this information is provided, the consumer is vulnerable to a slew of dangerous frauds, including identity theft in addition to facing several fees for a bounced payment.
Consumers who have tried to use this secret account to pay bills quickly find out that it doesn’t exist. The reality is that only banks--not consumers--have accounts with the Federal Reserve. But many people don’t know this, and in some cases, consumers will end up owing late fees to the companies they try to pay via the secret account.
Even if you don’t think you’d ever fall for this scam, there are several steps you should take to protect yourself:
Never send your Social Security, credit card, or banking account numbers to anyone who reaches out to you through an email or phone call. Only give this information to financial institutions and merchants you trust--and who you have contacted yourself. This information is often collected by scammers to steal your identity.
Remember: The Federal Reserve only does business with banks and government entities. Individuals are not able to bank with the Federal Reserve. Anyone who tries to tell you otherwise or help you access a “secret account” at the Federal Reserve is trying to scam you.
The Federal Reserve secret account scam is growing in popularity amongst fraudsters. We need your help stopping these scammers in their tracks. If you come across a video or receive a phone call or email telling you about a “secret” account at the Federal Reserve, please report it immediately to Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.