Scammers are constantly finding new ways to take advantage of digital banking and people looking for convenient financial solutions. Two scams that can be particularly damaging involve fraudulent mobile cheque deposits and fake online loan offers.
In one common scenario, a fraudster posing as an online lender convinces someone to provide their online banking credentials. The scammer then deposits a fraudulent cheque into the victim's account and quickly transfers the funds elsewhere—often through an e-Transfer, bill payment, money service business or cryptocurrency platform. The victim may believe they've received legitimate loan funds. But when the cheque is later identified as fraudulent, the money can be removed from the account, potentially leaving the victim responsible for the resulting loss.
The most important rule to remember: Never give another person your online banking username, password or security credentials.
Here's how these scams work, the warning signs to watch for and what to do if you think you've been targeted.
Mobile cheque deposit is a legitimate banking service that allows you to deposit an eligible cheque by taking photos of it through your financial institution's official mobile banking app. The problem occurs when fraudsters use counterfeit, altered or stolen cheques as part of a broader scam. In one version of the scam, a fraudster advertises a fake online loan and asks the victim to provide personal information or online banking credentials. Once the scammer gains access to the victim's account, they may deposit a fraudulent cheque using mobile deposit and then move money out of the account. The cheque may initially appear to have been accepted, but that does not necessarily mean the cheque is legitimate or that the funds are permanently available. Financial institutions may place holds on cheque deposits while the cheque is being verified.
“For Mobile Deposit Only” does not automatically mean a cheque is a scam. The warning signs are the circumstances surrounding the cheque.
For example, be especially cautious if someone:
A typical scam may look like this:
You see an advertisement or receive a message offering fast financing, sometimes with promises of easy approval or minimal credit requirements.
The scammer may request personal information, banking information or, in the most dangerous cases, your online banking login credentials.
The scammer deposits a fraudulent cheque into your account, sometimes through your mobile banking app.
The scammer tells you to transfer some or all of the funds to another account, business, cryptocurrency exchange or other recipient.
The financial institution discovers that the cheque cannot be honoured.
The money you transferred may already be gone, while the fraudulent deposit is reversed.
This is why you should never assume that money is yours simply because it appears in your account after a cheque deposit.
Be suspicious of unexpected cheques, particularly when they arrive as part of an online loan, work-from-home opportunity, prize or investment offer. If you don't recognize the sender, don't assume the cheque is legitimate.
This is one of the most important rules. Never allow an online lender, stranger or other third party to log into your online banking account for you. A legitimate financial institution should not require you to hand over your banking password so someone else can access your account.
A common fraud tactic is:
“Deposit this cheque, keep your portion and send the rest to us.”
Don't do it. If someone asks you to receive money into your account and then transfer it elsewhere, stop and verify the transaction independently.
A cheque deposit may be subject to a hold or subsequent verification. The fact that money appears in your account does not necessarily mean the cheque is legitimate. Canada's Financial Consumer Agency explains that cheque holds can be used to allow a financial institution to verify whether the cheque is valid and whether the account it was drawn on is open and has sufficient funds.
If you receive a suspicious cheque or think you've been targeted, don't try to resolve the situation with the person who sent it. Contact your financial institution directly using a trusted phone number or communication channel.
Online loan scams involve fraudsters pretending to be legitimate lenders.
They often target people who are:
Scammers may create professional-looking websites, advertisements and applications to make the fake lender appear legitimate. They may promise fast approval, guaranteed financing or unusually attractive terms. The goal isn't necessarily to provide a loan. It may be to steal your money, personal information or banking credentials.
This is a major red flag. Never provide your online banking password or allow a supposed lender to log into your account.
Be cautious when a lender claims that everyone qualifies regardless of their financial circumstances. Legitimate lending involves assessing the applicant and the loan.
Scammers don't want you to have time to research the company or discuss the offer with someone you trust.
Be cautious if you're told:
Requests for unusual upfront payments should raise concerns. Before paying any fee, independently verify the lender, understand the terms and make sure you're dealing with a legitimate organization.
Be cautious about providing sensitive information before you've established who you're dealing with and why they need it.
Extremely low rates, guaranteed approval, large loans with little documentation and pressure to act quickly should all prompt additional research.
If a supposed lender tells you they need to log into your online banking account to:
Stop.
Do not provide your username, password or security code. YNCU currently uses Two-Step Verification (2SV) for online banking, adding an additional verification step to help protect members' financial information. Even with additional security controls, you should never give another person your banking credentials.
Act immediately.
If you gave someone your online banking credentials or believe someone has accessed your account:
YNCU members should contact their financial institution as soon as possible if their banking credentials have been compromised or they suspect fraudulent activity.
Follow YNCU's instructions for securing your online banking access.
Look for unfamiliar:
If the scammer contacts you again, don't follow their instructions.
The Canadian Anti-Fraud Centre recommends reporting fraud and cybercrime even when there has been no financial loss.
If you suspect the cheque is fraudulent: Don't move or spend the money. Contact your financial institution immediately and explain exactly what happened. Don't attempt to “fix” the situation by sending money back to the person who sent the cheque. Your financial institution can advise you on the appropriate next steps.
Before applying for an online loan, take time to research the company.
Look for:
Don't rely solely on reviews displayed on the lender's own website. And don't assume that a professional-looking website means the company is legitimate.
Who is the lender?
Can you independently verify the organization?
What is the total cost of borrowing?
Look beyond the advertised interest rate and understand applicable fees and other costs.
Why do they need my information?
Only provide sensitive information when you understand who you're dealing with and why the information is required.
Why do they need access to my online banking?
They shouldn't.
Am I being pressured to act?
If you don't have time to research the offer, don't accept it.
At YNCU, protecting members' financial information is a priority. YNCU will never ask you to give another person your online banking password or provide access to your account so they can move money on your behalf. If you're unsure whether a communication or financial offer is legitimate, stop and contact YNCU through a trusted channel.
YNCU also provides mobile banking services, including mobile cheque deposits through its official app. Only use YNCU's official website or official mobile banking app to access your accounts.
If you believe you've been the victim of an online loan scam or fraudulent cheque scam:
1. Stop communicating with the scammer.
2. Don't send any additional money.
3. Contact YNCU immediately.
4. Secure your online banking and other compromised accounts.
5. Review your account activity.
6. Report the incident to the Canadian Anti-Fraud Centre.
For additional fraud-prevention information, visit the Canadian Anti-Fraud Centre.
Yes. The wording itself doesn't make a cheque fraudulent. “For Mobile Deposit Only” is a legitimate instruction associated with electronic cheque deposits. The concern is whether the cheque and the circumstances surrounding it are legitimate.
No. Never give an online lender your online banking password or security credentials. If someone says they need your login to approve or deposit a loan, treat it as a major warning sign.
Not necessarily. Cheques may be subject to hold periods and further verification. Ask your financial institution when funds are actually available before relying on a cheque deposit.
The deposit may ultimately be reversed after the cheque is identified as fraudulent. If you've already transferred or spent the funds, you may face financial consequences. Contact your financial institution immediately if you suspect fraud.
Contact your financial institution immediately, explain what information you disclosed and follow its instructions for securing your account. Change compromised credentials and monitor your account for unauthorized activity.
You can report fraud to the Canadian Anti-Fraud Centre and contact your financial institution and local police as appropriate.