Even in the digital age, people must continue to keep an eye out for financial criminals. Scammers, phishers, and fraudsters are highly adaptable groups of people, and they’re quick to utilize digital technologies to further their illegal activities.
That said, legitimate financial organizations are not taking the security threats posed by these tech-savvy criminals in stride. Corporate and retail banks are actively modernizing their processes to prevent scammers from gaining access to their systems and files.
Using digital technologies, banks of all sizes can now thoroughly investigate all their customers prior to onboarding, track large volumes of transactions in real time, and implement stringent security measures for their payment processing solutions.
These measures have made banks a difficult target for fraud and scams. As such, the perpetrators of these illegal activities have turned their attention to everyday customers. But forewarned is forearmed, and people who know how these fraudulent activities take place are better able to avoid becoming victims themselves.
Read on to learn some of the most common forms of fraud in the digital age and what to do in case you become a target.
Credit and Debit Card Fraud
Credit and debit cards can be wonderful tools for extending a person’s buying power and easily managing one’s finances. Unfortunately, many fraudsters think the same, and many of them use deception to acquire the credit card information of their victims.
There are myriad traditional and modern ways for criminals to acquire this information. Some of them hack into the database of retailers to acquire customer data.
Others put up fake retail and banking websites to entice customers to share their card numbers and PINs. Still, there are others who send carefully crafted emails and messages posing as bank staff members to their victims.
There are signs that can indicate that a person’s credit or debit card information has been compromised. These include the appearance of transactions that the victim does not remember making or transactions recorded in places that the victim does not frequent.
A victim might get an SMS or email notification from their bank about a recent transaction when they’re not even using their card, for example.
If confronted with this scam, it’s best to contact the bank through its official number and have the card canceled or freeze the account to prevent further financial damage.
Some banks even give their customers the option to cancel their cards from their mobile apps. From here, the victim can work with their bank and check out ways to get the money back and report the crime to the authorities.
Debt Collection Fraud
Some fraudsters resort to pressuring people to pay for a debt that they don’t owe. This is called debt collection fraud. The fraudsters who carry out this activity use intimidation or appeal to their victim’s sense of urgency to trick them into paying with cash or transferring money to another account.
In some cases, there are even predatory lenders who make use of online apps to legitimately loan money to their victims, then harass the borrower to pay back what they owe. Should the victim fail to pay, the lender may threaten to have them jailed or report their financial situation to the victim’s boss, relatives, and friends.
Some fraudsters also use this method to solicit financial information from their victims.
When faced with an aggressive lender, no matter if the loan is real or not, do not panic and do not reveal sensitive information over email or other forms of communication.
Rather, ask for a callback number and investigate the nature of the loan and the lending organization. It’s also important to know the local laws that protect borrowers from predatory lenders.
There are also fraudsters who have taken to appealing to their victim’s generosity by posing as charitable organizations. They may do this by putting up social media pages and websites where they can collect the financial information of their would-be victims.
Some even send their targets preemptive thank-you notes to trick them into thinking that they already support the bogus charity.
To avoid falling victim to such a crime, it’s important for people to do their research when sharing and giving. There are websites that are dedicated to rating how credible a charity is and how these organizations use the funds that they get to further the cause that they support.
It’s also worth noting that these fraudsters and unscrupulous individuals are more than eager to capitalize on other people’s suffering for their own gain. As such, be wary of new charities and viral social media fundraising campaigns that pop up immediately after a widespread disaster.
Be sure to do background checks on them to determine their legitimacy before making any donation. Should you discover that they’re fraudulent, report them through the appropriate channels.
Some fraudsters are tech-savvy enough to get through mobile and desktop applications that do not offer sufficient security. They can do this by sending malicious links and files that their victims might click. This, in turn, gives them access to information that their victim would otherwise not share with them.
By using non-ethical hacking and controlling other people’s devices, these fraudsters can find passwords, including those that are supposed to safeguard the victim’s finances.
Just like banks, it’s important for everyday consumers to embrace modernity and make use of the latest security apps and tools to keep their phones and other devices free from unauthorized access.
They can do this by updating their desktop and phone systems regularly and checking their banking apps for updates. It’s also worth knowing the tell-tale signs that a phone has been hacked so that further damage can be avoided.
Likewise, banks should make an effort to address the security issues in their mobile apps and banking platforms so that these cannot be exploited by criminals.
How Do Banks Protect Consumers in the Digital Age?
Everyday consumers are not alone in their quest to protect their financial integrity in the digital age. Banks are also making an effort to ensure that their customers are unlikely to fall victim to fraud.
For one, financial organizations are actively informing their customers through emails and SMS about the latest strategies that scammers are using. They also send messages to notify customers of suspicious transactions.
Plus, banks make use of Big Data to thoroughly investigate customers before granting them access to financial products and services. Because of this capability, customers can rest assured that the merchants and charities listed on their bank’s official mobile apps and web portals are legitimate organizations.
If a person sticks to making financial transactions and donations through their bank’s official channels, then there’s a good chance that they can steer clear of fraudsters.
Now, it can be difficult to avoid using third-party platforms when shopping online or sending money to other people. To ensure their customers’ safety, banks can also track transactions, including where and what time they are made, to see if the pattern deviates from the said customer’s usual activities.
This can help indicate fraudulent activity and enables the bank to put a stop to it immediately. On top of that, banks can also utilize multi-factor authentication and biometric data to check if the owner of the account is the one actually making the payments.
Thus, by working together and fully utilizing digital technologies, banks and customers alike have a better chance of preventing fraudsters from successfully accessing data and financial resources that they have no business using.