Financial fraud is on a rise all over the world as cyber-criminals hit us where it hurts the most – our pocketbooks. The impact of financial fraud related to financial data stolen from individuals can be measured in the billions of dollars every year, and the trend just keeps growing. The bank robber of days past has been replaced by the tech-savvy cyber-criminal who operates under the cloak of anonymity and can extend their reach to millions of unsuspecting victims from the convenience of their home.
Cyber-Criminals Are After 4 Main Types of Financial Data
- Bank Account Data
With details about their victim’s bank accounts, along with some basic information about their victim, cyber-criminals are able to pose as their victim and withdraw or transfer money out of the bank account. Banks typically have a hard time preventing this type of fraud because it’s often hard to distinguish legitimate account activity from fraudulent account activity.
- Credit Card Data
Cyber-criminals can easily duplicate a stolen credit card, or make fraudulent online purchases if they have certain details about their victim’s credit card. Hundreds of millions of stolen credit cards are up for sale on online black markets used by cyber-criminals to peddle their wares.
- Stock Trading Accounts
Similar to stolen Bank Account data, a cyber-criminal can use a stolen Stock Trading account to fraudulently make purchase/sale transactions on their victim’s behalf, and transfer money from the victim’s account to their own account. Since many stock traders have large sums of money invested in the market, an attack of this kind can be devastating to the victim of a stolen Stock Trading account.
- Mutual Fund/401k Accounts
Long-term investment accounts are also susceptible to financial fraud. Cyber-criminals that steal these types of accounts can transfer money out of the account with relative ease. Since Mutual Funds and 401ks are typically used as longer-term investments, their owners usually don’t check up on them as often as they would a Stock Trading account or Bank Account. This gives the cyber-criminal plenty of time to transfer the money and withdraw it before the victim notices that something is wrong.
Although there are certain safeguards in place at financial institutions to protect your investments, such as FDIC insurance and Credit Card Fraud forgiveness, they don’t apply in all cases. Even if you are protected by one of these safeguards, you will still end up spending a large amount of time and energy dealing with banks, credit card representatives, law enforcement, and other entities in order to clear your name.
Protect Yourself From Becoming A Victim
It’s important to proactively protect yourself from becoming a victim of financial fraud. Cyber-criminals typically go after quick money, and will move on to the next victim if you are adequately protected against their scheme. Here are some tips on how you can protect yourself from being a victim of financial fraud.
Monitor your financial accounts regularly.
Get into the habit of checking your accounts on a regular basis, even the long-term financial accounts. If you are informed on the status of your accounts you’ll be more likely to notice if there is anything wrong. If your bank or financial institution offers an option for alerting you on account activity, consider opting-in to this service so that you are alerted any time there is a withdrawal or transfer from one of your accounts.
Notify your bank or financial institution if you suspect fraudulent activity.
The quicker you notice and report fraudulent activity in one of your accounts, the less of a chance there is that the cyber-criminal will be successful in transferring the money. Many times there is a window of time between when money is transferred out of your account and when the cyber-criminal can take possession of it. If you’re able to catch the fraudulent activity during this window your bank may be able to reverse the transaction.
Use strong passwords on all of your financial accounts.
Make sure the passwords you use to access your financial accounts are strong and complex so that cyber-criminals are not able to easily guess them. Strongly consider utilizing “2-factor authentication” if your bank or financial institution offers it. For tips on how to create a strong password, please visit my previous post on choosing a good password.
Harden your computer’s security
A common vector of attack for cyber-criminals looking for financial account information in through the infection of their victim’s computers with password stealers and key loggers. You can protect yourself by:
- Keeping your Anti-virus up to date.
- Consider installing a secondary malware program, like Malwarebytes or Spybot.
- Perform a full Anti-virus scan on at least a weekly basis.
- Ensuring your computer’s Firewall is enabled.
- Enabling Automatic Updates on your computer’s Operating System.
- Keeping all third party software (such as Adobe Acrobat and Java) up to date.
Refrain for accessing your financial accounts on computers that don’t belong to you
Although you can take steps to ensure that your computer is secure, you can’t always rely on other people to secure their computers properly. Computers belonging to your friends, family, school, work, or a local internet café, can be infected with malware that can steal your passwords. When away from home, refrain from using these computers if you can. If you do use someone else’s computer to access your financial accounts, make sure to change the password using a trusted computer as soon as possible.
Beware of Phishing and Social Engineering by cyber-criminals
Your bank or credit card company will never ask for your password or detailed account information, especially over an email. If you receive an email that appears to be from your bank asking you to click on a link, consider visiting the bank’s main website through your browser instead of clicking on the link, or calling them and asking if they sent the email. If you get a phone call from your bank that sounds suspicious, call them back on the phone number listed on their official website.