Ways to keep scammers away!
Discovering a new bank account in your name or noticing unauthorised transactions on your statement can be alarming. Unfortunately, as our reliance on technology grows, so does the threat of banking scams. In 2023 alone, consumers in the US lost over $10 billion to fraud, according to the Federal Trade Commission (FTC). In the UK, in 2002, some £1.2 billion was estimated to have been lost to fraud, 80% of it from online scams.
But there's good news—you can safeguard yourself. By understanding how common bank scams operate and taking protective measures, you can prevent becoming a victim.
Common Bank Scams to Watch Out For
Charity Scams
Be wary of unsolicited calls asking for donations. Scammers often use fake names and vague claims. Verify the charity before making any contributions.
Check-Cashing Scams
In this scam, someone asks you to cash a check for them because they don't have an account at that bank. You deposit the check and give them cash, but when the check doesn’t clear, you're out the money.
Automatic Withdrawal Scams
Scammers may call or send a postcard claiming you've won a prize, asking for your checking account details. They use this information to create a demand draft, withdrawing money from your account without a signature. Always verify the legitimacy of such offers.
Telephone Fraud
What scammers do not lack is creativity. What stories they come up with to commit bank account scams. They always play on human curiosity, reliability, greed or other feelings. You should make it a rule not to give out any bank data during a telephone conversation, even if the person introduced himself as an employee of a reputable company.
One of the methods to combat any telephone fraud is to record phone calls. You can find Call Recorder for iPhone here and for sure, the application will be useful to you in the near future. With the app to record phone calls, you can not only fight fraud, but also record transaction details, protect yourself from disputes, forward a copy of the conversation to other people or simply save the recording for more detailed study.
Phishing Scams
Phishing scams use emails or texts to steal personal information like passwords or account numbers. These messages often look official, urging you to click a link and confirm details. Always verify the sender before clicking any links.
Government Imposter Scams
Scammers impersonate government officials, claiming you owe taxes or fees. Fake HMRC calls and messages seem to come through to my phone every few days, threatening legal action and putting on scare tactics; remember, government agencies will never ask for payments over the phone.
Overpayment Scams
If you sell products or services online, watch out for overpayment scams. Scammers send a counterfeit check for more than the amount owed, then ask you to deposit it and send the money back to their bank, minus the difference. The check will eventually bounce, leaving you responsible for any fees and lost funds.
Employment Scams
Job scams promise work in exchange for an upfront fee or bank details for "commission payments." These scams aim to steal your financial information. Always research job offers thoroughly.
Unsolicited Check Fraud
Receive an unexpected check in the mail? Be cautious. Signing and cashing it could bind you to unwanted memberships or loans. Always read the fine print to avoid costly commitments.
How to Recognise Banking Scams?
Fraudsters keep up with the latest technology, making some bank scams very sophisticated. However, there are a few red flags you can use to identify potential scams:
Urgency to Act: Scammers often pressure you to act immediately out of fear or confusion. If someone urges you to make a decision or send money right away, it's likely a scam.
Requests for Money: Legitimate banks and employers will never ask you to transfer funds or provide bank login information. Avoid any entity that does.
Unusual Payment Methods: Be cautious if asked to pay via gift cards or cryptocurrency. These methods are more anonymous and difficult to reverse compared to credit card payments or bank transfers.
Unexpected Communications: If you receive an out-of-the-blue call, text, or email from your bank, be wary. Instead of clicking on links, look up your bank's website and contact them using the number provided there.
How to Protect Yourself from Banking Scams?
1. Set Secure Passwords
Create strong, unique passwords for your accounts to protect against hacking attempts like brute force attacks. Additionally, enable two-factor authentication (2FA) for extra security, ensuring that even if someone gets your login details, they can't access your account.
2. Avoid Unsecured Wi-Fi Networks
When using public Wi-Fi, refrain from discussing personal information or making purchases. Hackers can intercept your data using man-in-the-middle attacks. If you must use an open network, enable a mobile VPN to secure your connection.
3. Consult Financial Advisors
Beware of scammers posing as bank representatives offering loans or investment deals. Always consult your bank's advisors to verify such offers. Stay vigilant against phishing texts and emails from unverified sources asking you to click on suspicious links.
4. Download Apps from Secure Platforms
Always download mobile banking apps from your bank’s official website or reputable app stores to avoid spoofing and malicious communications. Even if you receive messages from your bank, respond through the app or other secure channels to keep your financial discussions private.
5. Charge Your Credit Card Instead of Debit
Credit and debit cards each have their pros and cons, but when it comes to online purchases, credit cards often provide more peace of mind. One significant advantage is the zero-liability protection linked with most credit cards, which shields you from fraudulent transactions. In contrast, debit cards don't offer the same level of protection if money is transferred out of your account. Using a credit card for purchases that might be vulnerable to fraud can help you catch and stop scams at the source. If you or your bank notice suspicious activity quickly, you have a better chance of recovering any stolen funds.
I tend to use a pay-as-you-go credit card for payments made to a company I'm unsure about. That way, if they do try to steal your card details, they'll not be able to take more money off the card than you have loaded on to it. I always load the exact amount needed for the transaction onto the card to make sure it's always empty should fraud be attempted, as was recently the case as per the information below...
Barr drinks Facebook Scam!
I recently fell for a scam on a Facebook advert where I was offered a case of fizzy drink for £1.99 with free delivery, which seemed like a great deal, however, I was a bit suspicious and so used the pay-as-you-go card, and lo and behold, the day after I paid for my order I had 3 texts to say I had insufficient funds to pay for 3 orders placed using my card abroad, all of which were thwarted by zero funds in my account!
I like to think I'm really scam savvy, but it just shoews that no matter how savvy you are, you can still get caught out by scammers; luckily I managed to get away with it this time!
6. Monitor Your Accounts
You are entitled to a free annual credit report to check your credit entries and dispute any errors. Be sure to regularly monitor transactions from your main bank accounts, including savings, checking, investment, and retirement accounts. If you're worried about the security of your financial data, contact your bank to discuss additional security options.
Conclusion
Bank account fraud is a global threat, making it crucial to protect your money by recognising common scams. Staying vigilant and taking precautions are key to keeping your account safe since scammers continually invent new ways to deceive consumers and businesses.
This article outlines a few prevalent types of fraud, but there are many more to be aware of. If you fall victim to check fraud, peer-to-peer payment scams, ATM/cashpoint skimming, or phishing schemes, remember that you have options to minimise the damage and recover your funds.