5 Tips to Protect Yourself from Financial Fraud

Can you imagine a life without google pay, Paytm, Phone pe and other online payment apps? Absolutely not, right? Gone are the days where we used to stand in a queue to withdraw money from ATMs. Online payment facilities, internet bank transfers, mobile banking have made our lives easier, no doubt. With them, we can now pay and shop from anywhere and anytime without having to carry hard cash with us. Like all good things have a clause attached to it, you need to be extra cautious while using these facilities, else risk becoming the victim of financial fraud. 

Like how a single click is sufficient to make a payment, the same click is enough to land you in trouble and cause a financial loss. No one wants to fall for the trap set by financial fraudsters. Sadly, your information is everywhere. So how can you protect yourself from financial fraud? To help you protect yourself against the increasing financial frauds today, we have outlined 5 crucial tips. Without further ado, let’s deep dive into each one of them.

5 Tips to protect yourself from financial fraud

1. Limit sharing your personal information online or on call as much as possible

One of the most common types of financial fraud today is identity theft. According to the Aite Group, 47% of Americans experienced financial identity theft in 2020. The group’s report, U.S. Identity Theft: The Stark Reality, found that losses from identity theft cases cost $502.5 billion in 2019 and increased 42% to $712.4 billion in 2020. 

Identity theft happens when someone steals your personal identifying information to access your credit card or bank accounts. Not just that, they can use this information however they want. That is, they may sell your information in the black market, use your identity to commit a crime, obtain medical benefits, apply for a job, get a credit card, or even buy a house or car. 

So, think twice before sharing your private information anywhere. Also, restrain from sharing these personal details on social networking sites and never-ever transfer funds without confirming the identity of the person.

Most importantly, never share your personal information with a stranger or anyone who is posing as your bank representative asking you for your personal details such as your card CVV number, name, OTP, customer ID, internet banking password, etc. Note, these fraudulent callers may pose as a bank representative and ask you for your personal details citing many reasons like card expiry, unused reward points, free cashback, and so on. Some may even pose as a person known to you or your friend/family and ask you to transfer funds citing they have an emergency and need some money immediately. So, don’t heed to such requests. Verify all the details before you take any sort of action.

Thumb rule – always have your suspicious antenna up when talking to bank representatives/strangers on phone. Never give away your personal information no matter what. Because bank authorities never call you asking for such sensitive information.

The best approach here would be to avoid responding to such unsolicited calls, emails, or messages in the first place. And when you’re asked to provide your SIN or other personal information, ask why it’s needed, what it will be used for, and how the information will be disposed of once they are finished with it. 

2. Open your messages and emails with care – never click on links that you are unsure about

Scams via phone calls, messages, emails are an everyday thing now! What’s alarming is, hackers and fraudsters are using innovative ways to scam innocent people and loot their money and data. These scams are so brilliantly planned and executed that even a security professional may find it hard to detect them. 

So, this is what you can do to protect yourself from these types of financial frauds – whenever you receive a message or an email that asks you to click on a link, pause and think twice. Look up who that message is from, call them directly to verify the details, and only then take an action.

For instance, if you receive a message saying your card is blocked and you need to click on the link shared in that message to unlock it – pause a moment and think. Call your bank and verify if that’s true and then make a decision on what to do.

3. Dispose of trash – anything that has your personal information with utmost care

If you are throwing away your old debit/credit cards, bank statements, and any other paper that has your name and other details on it – then do so with utmost caution. Shred the papers, and break the debit/credit card into pieces before you throw them away. 

So the thumb rule – make it a habit to shred everything that has your details on it before disposal.

4. Always check your bills, credit/debit, and bank statements regularly

Do you check your bank statements regularly? If yes, good. And if not, it’s time you start reviewing your bank statements and account transactions from time to time. This will not help you analyze and control your spending but will also help you detect suspicious activity if any so that you can take action before it’s too late.

Another thing you can do is – putting spending alerts on your credit cards. Fortunately, most banks today allow you to set an alert at a predetermined threshold or anytime your credit/debit card is used.

5. Always be cautious and don’t let your guard down no matter what

Here are a few additional steps you can take to safeguard yourself from these different types of financial frauds:

  • Never share personal and sensitive information about your identity with anyone
  • Don’t share your bank account information over social media 
  • Don’t respond to calls asking for remote access to your computer. If this is from your office, verify the details and get a confirmation from your IT team before giving the system access to anyone 
  • Use secure internet connection always. Avoid using public Wi-Fi
  • Browse secure and authorized websites only. Read the site’s privacy policies before use. Because these policies will tell you how the site protects the personal information it collects. Most importantly, think thousand times before you give any details or click on any link on unknown websites
  • Use smart, verified apps only. If you are unsure about any app, don’t download it – it’s as simple as that!
  • Be extra cautious while using your credit/debit card or while even making online transfers
  • Most importantly, update your computer and mobile security from time-to-time
  • If you lose your credit/debit card – call your respective bank and block the card immediately
  • Change your bank account passwords regularly
  • Be extremely careful when you are doing an online transaction of any kind
  • If you think that someone may have access to your accounts or personal information, and if you doubt a suspicious activity in your account – report it immediately – to either your bank or cyber police

Bottom line

Make no mistake: financial fraud can happen to you or anyone you know. Unfortunately, many financial fraud incidents go underreported because people are embarrassed to acknowledge that they have been the victims of financial fraud. Fortunately, you can protect yourself from these financial frauds. And these tips should help you be safer and prevent financial loss from happening. If you think we’ve missed any points, please feel free to share them with us by dropping a comment. 

Also read: Why is EDI a Must-Have Solution for Financial Services Today?

Priyanka Prashob
Priyanka Prashob is an organizational psychologist with 6+ years of experience in the field of Content and Psychology. She is a passionate writer and has authored 2 books. She has designed content for corporate training programs, worked on organizational behavior reports and numerous individual personality assessment reports. Several research articles written by her are published on platforms like Academia and Research Gate. The articles have gained recognition and appreciation from universities, academicians, and researchers across the world.

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