Filed under: Identity Theft, Banking, Consumer Protection, Ripoffs & Scams, Internet Fraud
Bank fraud is particularly painful. Criminals have a number of ways of attacking your assets, including altering checks you've written, counterfeiting checks or getting access to a debit card. Once money is pulled out of your account, you have to act quickly for the bank to accept a claim of fraud. A delay can mean the difference between recovering money or seeing it vanish for good.
Here are some actions you can take now to prevent looting or at least limit your losses.
1. Use Multiple Bank Accounts
If all your money is in one bank account and a thief gains access, the entire amount is available, as Shaun Murphy, CEO of yet-to-launch online privacy company PrivateGiant, pointed out to DailyFinance. A solution is to break up your holdings across multiple accounts: one for investments, one for savings, a retirement account, an emergency fun, and a regular checking account for bills. Although you may see more total fees, the divisions become firebreaks that keep someone from siphoning out everything.
2. Skip the Debit Card
Privacy and identify theft experts often suggest leaving the debit card at home and depending, instead, on a traditional credit card. The reason is the legal protections differ between the two types of payment cards. Credit cards are protected by the federal Fair Credit Billing Act. If you properly report problems, card issuers are responsible for all but $50 of losses, and many will voluntarily cover even the $50 if you can show the charges were fraudulent. Debit cards are treated like checks and come under the Electronic Funds Transfer Act. Money is already gone -- rather than a reduction of immediately available credit. Your personal loss is still limited to $50, but only if you report the problem within two days. Between two and 60 days, you're liable for $500. More than 60 days, and you're out of luck. Some banks will offer similar protections to credit cards, but the prudent approach is to use credit cards instead.
3. Embrace Strong Security
Multi-factor security, particularly when it involves receiving a texted code that you then have to enter, is inconvenient. But it's worth the slight annoyance. Unless a thief also has your phone, online access to your bank account becomes less likely. The harder it is for someone to break into your accounts, the less likely that they'll keep trying.
4. Never Click On an Email Link
Phishing schemes, where criminals send an email designed to look like it comes from your bank in hopes of your providing account names and passwords, are rampant. If you get a message about an alleged problem with your account, never click the links in the email. Instead, log into your account as you normally would and look for any communications. If you click on a provided link, chances are that you'll be directed to a fake site designed to capture your information for someone to later raid the account.
5. Check Your Accounts Regularly
The single most important step you can take is to regularly review your accounts for fraudulent activity -- not once a month, but every couple of days. Doing so should only take a minute or two. Log into your online banking system and scan the most recent activity. If something seems off, you can look into the details or even call the bank and be sure that you actually do recognize the transaction. If not, you've spotted the problem quickly enough to invoke the highest levels of legal protection available.