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Your phone rings. The caller ID shows your bank’s name. A calm voice says there’s been a data leak, and they need to verify your identity before someone empties your account.
Clark Howard says that call is a trap, and he’s right.
In a Sept. 30 warning, the consumer champion described a bank impersonation scam that can wipe out a lifetime of savings in minutes. His advice for when that call comes: “Simply say, ‘Thank you so much for the alert,’ and hang up immediately.” (1)
The Federal Trade Commission says reports from older adults who lost $10,000 or more to business and government imposters, including fake bank callers like these, rose more than fourfold from 2020 to 2024. (2) Americans reported losing $3.5 billion to imposter scams in 2025. (3)
I’ve been writing about money for more than 35 years, and Clark gives great advice here. But one line in his warning could convince a victim to give up when they shouldn’t. Here are six things to know, including the federal rule that may get your money back.
1. How the scam works
Crooks spoof the caller ID so the call looks like it’s from your bank or brokerage. They often already have some of your personal information from old data breaches, which makes them sound legitimate. (1)
Then they ask you to read back a code that was just texted to you. That code isn’t proof of your identity. It’s the key to your account, generated because the scammer is trying to log in as you. (1)
Give it to them, and the money can be gone before you hang up.
2. Clark’s fix is exactly right
Never trust an incoming call, text or email that claims to be from your bank, no matter what the caller ID says. Hang up, then call the number on the back of your card or the one listed in your bank’s official app or website. (1)
A real bank will never be upset that you double-checked. A crook will never answer that number.
The FTC says these imposters work by inventing a crisis, then insisting “the only way out of the (fake) crisis is to follow their instructions.” (2) The moment someone says you must act right now, you know who you’re talking to.
3. Where I’d push back: You may not be on the hook
Clark’s warning says that when a scammer tricks you into handing over a code or approving a transfer, “financial institutions view you as a participant in the transaction.” (1)
Banks may well tell you that. But for a bank account, federal rules often say otherwise.
The Consumer Financial Protection Bureau addresses this exact scenario. If a third party tricks you into sharing your account access information and then uses it to move money out, the CFPB says, “the transfer is an unauthorized EFT under Regulation E.” (4)
That matters, because unauthorized transfers come with limits on your losses. The distinction: If the crook used your code to move the money, you have a strong claim. If you were talked into sending the money yourself, your protection is much weaker, and some wire transfers fall outside Regulation E entirely. (5)
Brokerage accounts can work differently, too, so ask your firm about its own fraud guarantee before you need it.
4. Speed is everything
In the classic case of a lost or stolen card or other access device, reporting within two business days of learning about it generally caps your loss at $50. After that, it can rise to $500. (6)
Fail to report a fraudulent transfer within 60 days after your bank sends the statement showing it, and you can be liable for transfers after that point with no cap. (6)
So if you think you’ve been hit, call your bank immediately, then follow up in writing. If the bank says no, ask in writing for the reason and file a complaint with the CFPB.
Staying ahead of the latest tricks helps, too. An AARP membership brings savings on prescriptions, eyeglasses and travel, plus the AARP Fraud Watch Network. At as low as $15 for your first year with auto-renewal, it’s cheap insurance against expensive mistakes. Check it out here.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
5. Assume your data is already out there
This scam works because crooks know enough about you to sound real. After years of mega-breaches, it’s safest to assume your name, address and even your account numbers are for sale somewhere.
Turn on account alerts for every withdrawal and login. Freeze your credit at all three bureaus. And keep an eye out for signs your information is being used.
Coveron — from Nord Security, the makers of NordVPN — monitors the dark web and your credit around the clock, then alerts you with clear steps to lock things down. If thieves strike anyway, identity theft insurance covers up to $1 million in eligible recovery costs. Start monitoring today.
6. Make a family rule before the call comes
Scammers win on panic. The best defense is a decision you make while you’re calm.
Here’s a simple one: Nobody in your family reads a code to anyone who called them. Ever. If “the bank” calls, hang up and call back at a number you know is real.
Share that rule with your parents, your kids and anyone else who handles money for you. Most brokerage firms, and some banks, also let you name a trusted contact they can call if something looks off.
The bottom line
Clark Howard is right about the most important thing: Hang up. No real bank needs you to read back a code it just sent you.
But if the worst happens, don’t assume it’s your fault and walk away. For a bank account, federal rules treat a transfer a scammer makes using access information you were tricked into sharing as unauthorized. Report it fast and put it in writing.
The crooks are counting on two things: your panic before the theft and your embarrassment after it. Don’t give them either one.
Sources: 1. Clark.com; 2. Federal Trade Commission; 3. Federal Trade Commission; 4. Consumer Financial Protection Bureau; 5. Consumer Financial Protection Bureau; 6. Consumer Financial Protection Bureau
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