With the significant and growing dependence of online platforms for financial transactions, financial account fraud is becoming a growing concern. In fact, of all new accounts created by identity criminals last year, 62% were financial accounts according to the Identity Theft Resource Center (ITRC). Not only does this pose a threat to every individual, but businesses as well.
In this article, we help readers understand the proper security measures they should take and how to stay vigilant against the rising threat of financial account fraud.
Understanding Financial Account Fraud
Financial account fraud poses a significant threat today, where personal and financial information is increasingly stored and accessible online. Identity theft criminals are gaining access to personal data, such as credit cards, account login credentials, Social Security numbers, bank account information, and much more to exploit everyday users.
As technology advances, criminals become more sophisticated. It is important to understand and stay up to date on current and all possible scams to reduce your chances of becoming a victim.
Here are a few examples of financial account fraud:
Synthetic Identity Theft
Synthetic identity theft, or identity fabrication, is a form of fraud where an individual’s Social Security number is stolen and combined with falsified information in order to create a new identity for the scammer. Without using fraud monitoring services such as IdentityIQ, this form of identity theft is rather tricky to identify. With this information, identity thieves are able to apply for loans, open new bank accounts, obtain medical care, or even file tax returns in victims’ names.
While this threat primarily targets vulnerable individuals such as children and the elderly, it’s important to recognize that anyone can fall victim to it.
Account Takeover
Account takeover fraud occurs when a malicious individual gains unauthorized access to your login credentials with the intention of unlawfully obtaining your funds and sensitive information. It all starts with acquiring personal details like email addresses and passwords, but it can quickly escalate to include credit card numbers, Social Security numbers, and even your bank account information. The repercussions of this fraudulent activity can range from credit card fraud and identity theft to various other forms of financial fraud.
Often, account takeover criminals will try to go unnoticed. They will change the account information and password before you are ever aware your account information has been compromised.
New Account Fraud
Unlike traditional identity theft, new account fraud involves the creation of fabricated identities. Criminals piece together new and false information in order to obtain loans, credit cards, or open new bank accounts. They will falsify Social Security numbers, addresses, and even names in order to establish a false identity.
Once this identity is created, criminals quickly make purchases, accumulate debt, or even engage in money laundering activities.
Common Vulnerabilities and Targets
Banking and Credit Card Accounts
Banking and credit card accounts are prime targets for account fraud due to the significant value attached to them. Once obtained by a criminal, they are able to attempt unauthorized transactions, potentially wipe out your account, transfer funds, make fraudulent purchases, and engage in identity theft.
Online Payment Platforms
Online payment platforms are extremely convenient and widespread. However, they have become a prime target for account fraud for that very reason. Cybercriminals are able to exploit information from these platforms by hacking their security systems. With doing so, they are able to obtain unauthorized access to user accounts and payment information.
Investment and Retirement Accounts
Due to the substantial asset and long-term savings that investment and retirement accounts hold, they have become increasingly popular for criminals to hack into. By gaining access to your personal information, they can hack into your accounts to make withdrawals, transfer funds, manipulate your investment portfolios, and more.
Recognizing the Signs
There are a multitude of ways to keep you and your accounts protected from fraudulent harm. Recognizing the signs of potential account hacking is the first step to saving yourself from financial disaster. Monitor your transactions and check your bank statements to ensure that you alone are the one making the withdrawals and purchases on your account. Be aware of any changes to your account information.
Ensuring that your username and password is constantly up to date, your email address and physical address are correct, and any other personal information tied to your account is correct, will protect you from a criminal taking over your account. It is important to be weary of all bank communication as well. Any emails or physical mail you receive from your bank should be looked over in detail to ensure all communication is between you and your financial institution alone.
Strategies to Protect Yourself
Keep Important Documents Safe
First and foremost, keep any physical copies of personal information safe. Do not carry your Social Security card in your wallet or write it on public documents. Always be aware when giving it out, and only do so when absolutely necessary. Since criminals can sort through trash to find personal information, shred any financial statements or sensitive documents that are no longer needed.
Monitor Account Activity and Statements
Always monitor your bank statements and credit reports. This allows you to be aware of activity and credit inquiries on your account. It would be beneficial to regularly check to make sure the information tied to your account is accurate, including physical address, email address, first and last name, username, and password.
Two-Factor Authentication
Two-factor authentication (2FA) verifies your identity in multiple steps. A password followed by a fingerprint or possibly a question only you know the answer to. This helps neutralize the risk of your account being compromised. If your password were hacked, the two-factor authentication helps prevent criminals from gaining access without the second approval factor.
Be Cautious
Never click on suspicious links or emails when browsing the internet. Criminals create these in order to hack into your database to obtain your information.
Freeze Credit Reports and Set Fraud Alerts
Freezing your credit report allows you to safeguard your personal information against fraud. This freeze immediately restricts access to your credit reports, making it quite challenging for criminals to open new accounts using your identity. It helps prevent unauthorized access to your personal data.
Software Updates
Keeping your devices and software up to date is a critical step in helping prevent financial account fraud. This provides maximum security and bug fixes to protect you and the vulnerability of your device. Keeping your browsers and antivirus software updated allows you to have the most current defense against emerging threats.
How to Recover from Financial Account Fraud
If you believe you are a victim of financial account fraud, report it immediately. Report it to your local law enforcement. Then you can report it to the Federal Trade Commission.
Invest in a credit monitoring service. IdentityIQ works with you to help ensure your information is safe and remains protected. Their team of experts also constantly monitor and notify you of possible suspicious activity that occurs on your account.
Bottom Line
Protecting yourself from financial account fraud is a constant responsibility in today’s society. The threat of fraud is prevalent now more than ever, targeting our financial and personal lives. Learning and understanding the methods these cybercriminals use to gain access to your information is key to helping keep yourself protected. Investing in a credit monitoring service is an easy and stress-free way to keep your identity safe at all times.
IdentityIQ identity monitoring services work to preserve your financial well-being and peace of mind, especially in this ever-growing digital landscape.