Banking has never been easier thanks to new technologies that let you use your smartphone for banking or shopping, your computer to make remote transactions, and smart credit and debit cards to simplify payments. Unfortunately, that same technology also has created new opportunities for criminals to commit bank fraud. New payment systems and technologies have opened new avenues for cybercriminals to steal your identity and access your bank and credit card accounts.
According to a recent study by Javelin Strategy & Research, bank fraudsters are moving away from credit card fraud and focusing on account takeovers. Losses from credit card fraud dropped from $8.1 billion in 2017 to $6.4 billion in 2018. Most of these losses are borne by banks and credit unions, and the drop in losses may be partly due to the mandated adoption of smart-chip, EMV credit cards. However, there has been an increase in account takeovers and new account fraud (i.e., using someone else’s name and credit to buy goods and take out loans). Unlike credit card fraud, account fraud affects consumers directly, including their credit, and it can take years to recover from identity theft.
What this means for bank customers and credit union members is they need to be wary of fraudsters looking to steal their bank account, credit card, and personal information. Fraudsters use many tricks to get you to part with sensitive information. Here are just a few to consider.
Securing Your Physical Bank Cards
When you use your credit or debit card in a store, at a restaurant, at an ATM, or for any transaction, take some routine precautions:
- Watch for card skimmers. A card skimmer is a card-swipe reader that is inserted where a credit or debit card reader is normally used, such as at an ATM or a gasoline pump. The skimmer will read your card information, and when the skimmer is retrieved, that information can be used to clone phony credit cards. To avoid skimmers, watch for something unusual, such as a broken security seal on a card reader, a protruding card reader, or a card reader of a different color.
- Watch for credit card double-dipping. Sometimes an unscrupulous waiter or store clerk may scan your card twice, using the second swipe for unauthorized purchases. When possible, keep your card in sight at all times, and put it away as soon as the transaction is complete.
- Set up transaction alerts. Most banks and credit unions let you set up alerts so you receive a text or email every time a transaction over a preset limit is made on one of your accounts.
- Watch your accounts. The easiest way to prevent bank fraud is to keep a close eye on your bank account. Log in to your account online and look for unusual activity or unauthorized transactions, and report them to your bank or credit union as soon as possible.
Avoid Online Scams
Even more bank fraud is occurring online, so protect yourself and use common sense.
A lot of fraud is perpetrated via email. If you receive a message saying you have won a contest or looking to lend you money, assume it’s a scam. You also may receive suspicious emails, purportedly from your bank or credit union, requesting you log in to address an issue or access information. Never click on a link embedded in an email. Scammers will create phony emails and websites that look authentic to trick you into giving up personal information. If you want to check an online account, open your browser and log in directly.
Change your passwords regularly. Even the most cautious web surfers can access the wrong website or contract a computer virus. Protect your online credentials by using complex passwords that include special characters and numbers, and use different passwords for different sites. A variety of tools, such as LastPass, can help you keep track of your passwords.
Consider using a third-party payment system such as PayPal. This gives you control over how you pay for transactions (e.g., with a credit card or debit account) without exposing your personal information.
Never access your account from a shared computer or over an unsecured Wi-Fi network. Accessing the internet via a public network, such as in the local coffee shop, makes your system easy to hack.
If you are concerned about identity theft or bank fraud, you can be proactive and freeze your credit. That way, identity thieves can’t access your credit report.
iQ Credit Union also offers identity recovery services for all our members. If your identity is stolen, these services will provide advocates who will work with you for up to a year, helping you notify credit bureaus, creditors, government agencies, and more. They also work with law enforcement to try to catch the fraudsters.
Fighting bank fraud is a team effort that requires participation by both consumers and financial institutions. Be smart and be safe, and if you think your account has been compromised, contact your bank or credit union right away.