Imagine your horror when you log in to your banking app and see that your balance is a figure far lower than you expected it to be. Where did the money go? You know for certain that you didn’t spend anywhere near that much money since the last time you checked. Or, what if you start getting notifications that your credit card was used for exorbitant purchases online, on websites you’ve never heard of?
If that rings a bell, chances are you’ve been a victim of bank fraud. If you haven’t heard of bank fraud, consider yourself lucky. It can happen to anyone, especially if you’re a little careless with your personal information, both online and in the “real world”.
What is bank fraud? Let’s give you a well-defined description of the term. Bank fraud is when money, assets, or other property owned or held by a financial institution (like a bank) is illegally obtained. This is serious theft and usually happens through duplicitous means, where someone might pose as a bank or another individual to steal those assets.
But how does one protect themselves against bank fraud in 2021? Bank fraud cases today are often linked to identity theft. With this in mind, the key to staying safe against bank fraud is to keep your personally identifiable information private and to ensure that it doesn’t get into the wrong hands. This may sound easy, but the possibility of having your identity stolen digitally is never zero.
With the way we live today, we need to protect our digital selves in order to avoid becoming a victim of bank fraud. Read on to learn how to keep yourself from becoming a target.
Businesses Should Reconcile Corporate Accounts Daily
Either at the end of the day or at the beginning of each day, banking accounts and transactions need to be reconciled. For businesses, bank fraud can be disastrous for their reputation and credibility going forward. Reconciling accounts daily helps to ensure that your business catches any transactions that you didn’t make, so that you can quickly notify your bank and begin to rectify any errors.
Doing this daily allows you to get on top of the situation as soon as possible. This increases the likelihood of retrieving stolen money since the bank will be able to reverse the transaction. While this is essential for businesses, this rule can be applied to the accounts of individuals, too.
Dual and Triple Controls Are Essential
In the corporate world, it’s necessary, standard practice to have dual controls involving banking transactions. However, many suggest that triple controls should become the norm, now. This would help to ensure that every major transaction is fully authorized without any funny business flying under the radar. A triple control at the corporate level entails that the first person creates the transaction, another person approves the transaction, and a third person sends the transaction.
This may not always be feasible, but there is always another solution to ensure safety and minimize the risk of bank fraud. Setting up an Automated Clearing House (ACH) payment with the banking institution is an alternative and can be done live or through an automated voice response system.
Use Two-factor or Multi-factor Authentication
Creating a good, strong password to log in to your bank account is essential, but this is often not enough to keep hackers out of your accounts. Even with a very complex password, hackers have been able to decrypt it and gain access to your account – and your funds. This is where two-factor authentication and multi-factor authentication comes into play.
Essentially, by employing two-factor or multi-factor authentication on your account, you add more layers of security to your account. This means that even if a hacker is able to decipher your password, they still have more barriers to pass before being able to get in. You’re fortifying your defenses by enabling these security features.
With multi-factor authentication, you’d need a password to sign into your bank account, but you can also add a fingerprint scan or facial scan to the mix. You’ll also receive a one-time code to your smartphone that you’d need to type in to log in. So, if a hacker does learn your password, they’ll also need access to your phone and fingerprints or face. While multi-factor authentication is not 100% safe, it still makes it a lot more difficult for anyone to get access to your bank account.
Be Wary of Wi-Fi Hotspots
Public Wi-Fi networks are not safe. Since they’re public, anyone within range can connect to these networks while you’re also connected. Even if you’re at your favorite café where you sit down to work every day, you can never be too sure who else is using the same network, tracking and logging what you and others are doing.
A rule of thumb to follow is not to conduct financial transactions of any kind while on a public Wi-Fi network. This means that you should refrain from online banking, trading, and even online shopping if you’re not on a secure network.
The best thing for you to do would be to conduct those transactions that involve credit cards or banking details of any kind at home while on a secure connection. If you really have to do so, use your smartphone as a personal hotspot (make sure it’s password protected, of course).
While we’re on the subject, it would be best to use a VPN when connecting to a public hotspot in general.
Fraud Detection Is Helpful
Check if your bank offers fraud detection and opt to use this as an added security feature. This helps you to know if suspicious purchases have been made from your account. Credit card companies and banks will send push notifications to your mobile device, allowing you to confirm whether you really made a recent purchase or not.