There’s a good chance that you or someone you know has experienced checking account fraud. The American Bankers Association’s 2017 Deposit Account Fraud Survey Report, which sampled 138 banks of varying sizes, states that debit card fraud accounted for 58 percent of industry losses. Check fraud was the next most common fraud type, accounting for 35 percent of industry losses. Other channels, including online banking and electronic transfers such as wires and Automated Clearing House (ACH) payments, accounted for 7 percent of industry losses. Any time you write a check, use your debit card, pay a bill online or sign up for an ACH payment, your account becomes vulnerable.
The following measures can help you prevent fraud and/or more quickly identify fraud:
Check your account(s) daily or at least every few days. It may seem extreme, but it’s not — especially when it comes to fraud associated with a debit card. Of course, it’s not good if you experience fraud with your credit card, but in these instances, it’s not technically your funds on the line. With a debit card, fraudsters could clean out your checking account quickly, so it’s critical that you take every possible precaution to protect your money! Monitoring your accounts regularly will not only enable you to manage your finances more successfully; it could also help you identify potentially fraudulent activity sooner to prevent additional fraud.
Be careful sharing banking information. Thieves are looking to collect any information on you that they can and have found ways to make emails, texts and other messages look exactly like the real ones you get from your bank or other companies — even using the exact logos and language you’re accustomed to seeing. If you question the authenticity of an email, text or phone call, contact your bank directly to investigate further. Remember, your bank already has your account and debit card numbers, so you will not be asked to provide this information via text, email or unsolicited phone calls. Also, keep your PIN numbers in a different location from your cards.
Safeguard your checks. In the electronic world in which we live, a fraudster only needs access to your routing and account numbers to compromise your accounts. In addition, if checks were stolen from the back of your checkbook, it could take quite some time before you notice them missing, especially if you’re not monitoring your accounts regularly.
Use a credit card when shopping online versus using a debit card. The risk of fraud is higher with Internet transactions; therefore, using a credit card shifts the liability to the credit card company while safeguarding the funds in your checking account.
Set up alerts on your checking account(s) to notify you if your balance drops below a certain dollar amount or if a transaction exceeds a certain threshold. Some financial institutions also have mobile apps, allowing you to receive alerts each time your debit card is used and to disable your card in the event of fraud, theft or loss.
Preventing business account fraud
In addition to the above, businesses often fall prey to additional scams such as Business Email Compromise (BEC). BEC is a sophisticated scam targeting businesses working with foreign suppliers and companies that regularly perform wire transfer payments. Compromising legitimate business email accounts through social engineering or computer intrusion techniques to conduct unauthorized transfers of funds carries out the scam.
Business accounts are targeted more frequently due to maintaining larger account balances. Services such as Positive Pay, Paid Check Review, ACH Debit Blocks and ACH Debit Filters are great solutions to safeguard these funds. The required timeframe for businesses to report ACH fraud is often shorter than on consumer accounts, so protecting and monitoring accounts regularly is essential. If you own a business, have a conversation with your banker to ensure your accounts are properly protected.
As it is said, “the best offense is a good defense,” so taking a proactive approach is the first step in protecting you from fraud. If you do find suspicious activity on your account and/
or debit card, contact your bank