Bank fraud continues to be an ongoing problem for the financial industry. In 2017, Federal Trade Commission’s (FTC) Consumer Sentinel Network received 1.1m fraud-related identity theft reports, costing the victims $905m in losses. With an unprecedented increase in online shopping and online payments, the trend continues to rise at an alarming rate. According to the FTC, the number of complaints about identity theft surged from 651,000 in 2019 to 1.4 million in 2020.
So, how to prevent bank fraud in such an insecure online banking landscape? In this guide, we’ve compiled some effective ways to prevent bank fraud in 2021.
While there are numerous security solutions in place, genuine solutions won’t come until both banks and their customers fully understand the real risks they face. An in-depth understanding of the threats will generate enough pressure on the industry to have the best fraud-proofing solutions in place.
Some banks and credit card companies will immediately send a push notification when a transaction occurs from a different state than yours, a significant amount is charged against your credit card, or when any other suspicious activity occurs. The transaction will only complete when you confirm it on your smartphone. If you select ‘No,’ the fraudster won’t be able to finish the transaction. If your bank offers this service, be sure to sign up for it.
Multi-factor authentication combines something you know, such as your passcode, with something you have, such as your smartphone. For example, if you’re required to enter your password or use your fingerprint or face to access your account, you’ll also receive a one-time code on your smartphone that you must enter to complete the action. While the solution is not 100% secure (like if someone manages to steal both your credit card information and smartphone), it stills puts you in a much safer position than otherwise.
You never know whether the internet connection is secure. If it’s not, your sensitive information can be tracked and stolen without you knowing about it. Either use your mobile data for urgent transactions or wait until you can access a secure Wi-Fi connection at your home.
Reliable, updated anti-malware is not only capable of tracking, quarantining, deleting and reporting suspicious agents or viruses coming into your system but also block or flag sensitive information going out of your devices.
While the above-discussed guidelines should help prevent bank fraud, if you still face the problem, report the issue to your bank at your earliest. Bank fraud reporting is crucial to minimizing your loss and excluding your liability for any charges.
Adobe Stock / Oulaphone
So, how to prevent bank fraud in such an insecure online banking landscape? In this guide, we’ve compiled some effective ways to prevent bank fraud in 2021.
1. Build Awareness About Bank Frauds
If you think about it, the primary reason for bank customers facing financial scams is their lack of knowledge about bank frauds. Most users who take the time to learn about the problem are those who’ve already lost funds to a fraudster. To ensure that people don’t learn the hard way, it’s important to educate the masses about bank frauds and how they are committed.While there are numerous security solutions in place, genuine solutions won’t come until both banks and their customers fully understand the real risks they face. An in-depth understanding of the threats will generate enough pressure on the industry to have the best fraud-proofing solutions in place.
2. Keep Reviewing Your Bank Statement
People with frequent banking transactions can easily miss minor frauds happening to them. Reviewing your bank statements from time to time helps you detect things you may have overlooked in the past or when the transaction may have taken place. If anything looks odd, report it to your credit card company or bank without any delay.3. Opt for Push Notifications for Transactions
Sometimes, you don’t even realize that your debit or credit card information has been stolen. This is often true when you have your sensitive information saved somewhere on the internet. When that happens, you won’t know when and where your credit card is being used. This is where push notifications can help.Some banks and credit card companies will immediately send a push notification when a transaction occurs from a different state than yours, a significant amount is charged against your credit card, or when any other suspicious activity occurs. The transaction will only complete when you confirm it on your smartphone. If you select ‘No,’ the fraudster won’t be able to finish the transaction. If your bank offers this service, be sure to sign up for it.
4. Leverage Multi-Factor Authentication
Also, known as a multi-layered security structure, multi-factor authentication is one of the best ways to prevent bank fraud in 2021. It’s based on the premise that you should not rely on a single solution, no matter how robust it is. It still keeps your financials compromised. Adding a layer of defense makes it harder for fraudsters to access your sensitive data.Multi-factor authentication combines something you know, such as your passcode, with something you have, such as your smartphone. For example, if you’re required to enter your password or use your fingerprint or face to access your account, you’ll also receive a one-time code on your smartphone that you must enter to complete the action. While the solution is not 100% secure (like if someone manages to steal both your credit card information and smartphone), it stills puts you in a much safer position than otherwise.
5. Stay Cautious While Using Public Wi-Fi
When you’re at a coffee shop or a shopping mall, avoid using public Wi-Fi to conduct any financial transactions. Similarly, when you check-in at a hotel, are waiting in the airport lounge or sitting at your college library, don’t use their public computer to make online payments.You never know whether the internet connection is secure. If it’s not, your sensitive information can be tracked and stolen without you knowing about it. Either use your mobile data for urgent transactions or wait until you can access a secure Wi-Fi connection at your home.
6. Install Reliable Anti-Malware
With rapid digitization, we’re more connected to the rest of the world than ever before. In fact, it’s not long before all our appliances are connected to the internet and controlled from there (what you see in smart homes). What many of us don’t realize is that everything that goes online also becomes susceptible to cybercrimes and online theft. Without robust security software, your laptop, tablet, and even smartphone can be a victim of malware and other virus attacks. Then, you can easily be tricked into giving out sensitive information such as your credit card information.Reliable, updated anti-malware is not only capable of tracking, quarantining, deleting and reporting suspicious agents or viruses coming into your system but also block or flag sensitive information going out of your devices.
7. Shred Items Containing Your Sensitive Information
Remember, anything with your name, financial details, and/or address is classified as sensitive information that can be used to steal your money. Be sure to shred any documents, cards, or slips that need to be disposed of. For example, if you closed one of your credit card accounts, be sure to shred the physical card properly. Similarly, tear off the slip you get after cash withdrawal at ATM so that your name, bank balance, bank account, etc., are no longer visible.Conclusion
The COVID-19 crisis, with its social distancing measures, has prompted us to turn to the internet for every single purchase. Even those who preferred to shop in person have been forced to place online orders. With a large number of not-so-savvy professionals shopping online, it’s no wonder that a lot of sensitive financial information stays online and is accessed by external entities. Hence, there’s an ongoing need to educate online users on ways to prevent bank fraud in 2021 and deploy strong security measures.While the above-discussed guidelines should help prevent bank fraud, if you still face the problem, report the issue to your bank at your earliest. Bank fraud reporting is crucial to minimizing your loss and excluding your liability for any charges.
