Foreign Scammers Use U.S. Banks to Fleece Americans

Original Article ↗ Hacker News Discussion ↗

Bank controls, KYC, and ACH behavior

  • Several comments argue KYC/AML mostly burden honest users while serious criminals bypass them with stolen identities and foreign accounts.
  • Others note KYC can be made much stronger (device fingerprinting, IP/proxy checks, address PIN mailers) but banks often stop at cheap, low-friction checks.
  • ACH is described as technically fast (clearing multiple times/day; settlement overnight). Delays to customers are largely policy: banks can choose to post quickly or hold funds “for risk” or profit from float.
  • Some users want slower, user-configurable withdrawal paths as a security feature, contrasting with banks’ current “delays when it suits them” model.

Responsibility and regulation (US, UK)

  • Many think US banks could do far more to detect and block obvious scam flows but have calculated that lax enforcement and low penalties make non-compliance profitable.
  • The UK move to require reimbursement of many scam victims gets mixed reactions:
    • Supporters say banks are already good at flagging dubious flows and will investigate; money mules are often caught/locked out.
    • Skeptics worry about victim–scammer collusion and higher costs pushed onto all customers. Some think caps like £85k are too low; others think reimbursing even authorized transfers is too generous.

Source countries, sanctions, and geopolitics

  • One group wants hard sanctions on countries that harbor scam operations (India, Southeast Asia, China-linked groups), arguing the scale of losses and reputational damage is huge.
  • Others downplay the macroeconomic impact (~0.6% of US GDP cited) or argue foreign governments prioritize their own citizens and have bigger strategic grievances with the US.
  • A long subthread descends into competing accusations about US regime-change operations, CIA plots, and Indian internal politics; these claims are heavily disputed, with others labeling them conspiratorial or unsupported.

How pig-butchering works and why it succeeds

  • Core mechanism: months-long relationship-building (often romantic or intimate) on messaging apps, then gradual introduction of “inside” investment opportunities, usually via fake but convincing trading platforms.
  • Several note this is distinct from simple “urgent” scams; by the time money is requested, the scammer no longer feels like a stranger but a close online friend or partner.
  • Some speculate AI tools make this more scalable by helping personalize outreach and maintain long conversations.

Victim mindset and impact

  • Commenters emphasize loneliness, emotional need, and social isolation as key vulnerabilities; even educated, tech-savvy people can be “activated” at the wrong moment.
  • Multiple personal stories:
    • A widowed mother on a dating site liquidating retirement savings and taking high-interest loans for a “match.”
    • A tech-savvy but lonely man repeatedly sending money to obvious catfishes and missing mortgage payments.
    • Elderly or foreign-born victims manipulated via threats to loved ones or fabricated emergencies.
  • Victims often later describe their own actions as incomprehensible and feel too ashamed to report, which hides the true scale.

Crypto, gift cards, and payment rails

  • One commenter wants to avoid cryptocurrency entirely, seeing its use in scams as reason for strict regulation.
  • Others counter that gift cards constitute a larger portion of scam payouts, yet attract far less criticism.
  • Scams typically funnel fiat into crypto or other hard-to-reverse channels through compliant or negligent banks; some argue “following the money” would expose both scammers and complicit institutions.

Skepticism of AML/KYC and proposed fixes

  • Some view deputizing banks as frontline law enforcers as inherently flawed and analogous to telecoms or logistics firms being forced to inspect all traffic.
  • Others respond that banks receive massive state support and should shoulder substantial compliance responsibility; the real issue is weak enforcement and insufficient penalties.
  • Suggestions include: stronger, enforced KYC; reversible or insured cross-border transfers; and more aggressive action against jurisdictions and institutions that tolerate scam operations.