Prevent Bank Fraud: 5 Important Tips

bank fraud

Bank fraud is likely one of the last things on your mind – until it happens to you.  The American Banker’s Association reported in 2009 that over 80% of banks experienced check fraud losses.  Industry wide, the loss from bank fraud involving check-related instances only amounted to over 1 billion dollars.

That figure is difficult to comprehend, so think about $1,200 vanishing from your checking account tomorrow.  That’s the average amount reported by victims according to the most recent report from Gartner Inc. as reported by Information Week.

The good news is that most banks have identity theft and bank fraud protection departments designed to help you recover from these types of attacks.  Unfortunately, the bank safeguards don’t always catch these fraud attempts, which is why you should be aware of ways to avoid bank fraud.

1. Review Statements Monthly

It’s easy to brush aside your statements, especially when they’re sent via email.  Break the habit of deleting the email and make sure you review the statement thoroughly.  Look for transactions that look abnormal.

In checking over my statements a few years ago, I noticed a transaction under $50 from somewhere in Germany.  I hadn’t purchased anything online that month and certainly hadn’t been over to Europe.  I called the fraud department and they resolved the issue for me.  If I hadn’t checked my statement, I would have lost the money and potentially more if they continued to hack my account.  I was issued a new account and card number for protection.

2. Store Statements in a Safe Place

It’s easy to get the mail and forget it on the table before you leave for the evening.  If you’re not in the habit of filing your statements right away, you could inadvertently leave private information out in the open when guests, babysitters, or extended family is around.

Keep your bank and credit card statements far away from the high-traffic areas of your home.  It’s best to keep them filed in your office or in a room that’s out of sight.

3. Discard The Right Way

A lot of your personal information is floating around on statements and other pieces of mail, so decrease your chances of fraud by investing in a quality paper shredder.  Old bank statements, checks, and other outdated documents should be shredded regularly.  With access to statements through your bank and through online logins, there isn’t much of a reason to keep statements beyond a year.

Also be mindful of how you store and delete statements on your computer.  A folder titled “bank statements” is a red flag for someone who stumbles across your files through a shared connection.  Don’t make it easy for an identity thief to steal your information.

4. Don’t Log in at Public Places

Libraries, coffee shops, and public schools are places that you should avoid checking your bank information.  While these places try to provide secure connections, it’s no guarantee that someone doesn’t break through the firewall and search through your files.  That’s why you shouldn’t have a folder called “bank statements” or “online passwords.”

5. Change Your Password Frequently

A recent CNN Money article revealed that the most common password is … you guessed it: Password1.  Do yourself a favor and don’t use the word password in any of your passwords – especially for your banking information.  Even better, make sure your password is a mixture of uppercase, lowercase, numbers, and symbols.  For added protection, it’s recommended that you change your password every couple of months.  How long have you been using the same password?

If you have some time today, check with your bank about how they handle bank fraud.  Gather the numbers you would need to call if you suspect bank fraud and take some time to follow these steps to insure against fraudulent activity.

Have you ever been a victim of bank fraud?  What advice would you give for protecting your banking information?  Leave a comment below!

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  1. Carl Lassegue

    Great article! Point #4 is very important, especially if the wireless connection is not password protected.

  2. Alvin Moore

    Very good article. I agree with the comment about watching out for wireless in public places, and want to add my amen to the comment about watching your bank statements. In particular, we once had a VISA charge of about $13 dollars a month appear on our statement for 6-7 months before we noticed it. By the time we noticed it and called VISA about it, we were able to get back about 5 months of it. Also, the only way to stop the charge once it was discovered was to destroy our card and get a new one, which is a hassle, but obviously well worth it.

  3. Susan Cooper

    Point well taken. It is something everyone should read and heed. I am not as diligent as I should be when it comes to these things but it has given me pause and put me into action. Thanks for that. :-),Susan Cooper

  4. Stacy Makes Cents

    These are really great tips! I posted them as my Daily Duh on Facebook and credited it back to your article. Thanks!

  5. Great article! Being the paranoid sort, I’ve been fortunate to catch two fraud incidents on my account quick enough to minimize the damage.
    One site that I’ve been really impressed with to make step #1 easier is I’m not an affiliate and this isn’t an ad for them, I use them personally and am just recommending them.
    They are a free service that scan your bank accounts and credit cards for suspicious activity and alert you if they find any. It works kind of like the anti-spam email tools in that it uses “crowd” analytics and known fraudulent sources to tag transactions.

  6. accept payments online

    To prevent fraud, you should use proper care to ensure the security of documents, (both paper and electronic) containing information such as bank account numbers, credit card numbers, social security numbers, student ID numbers, phone numbers, addresses, mention of payments to individuals, etc.