Multiple types of bank fraud have been on the rise in recent years in the United States, with statistics showing that:
- Check fraud is increasing, according to reports from the Federal Bureau of Investigation (FBI) and United States Postal Inspection Service (USPIS). Check fraud–related Suspicious Activity Reports nearly doubled between 2021 and 2023.
- Consumer losses to fraud jumped by 25% to $12.5 billion between 2023 and 2024, according to Federal Trade Commission (FTC) data. Investment scams ($5.7 billion in losses) and imposter scams ($2.95 billion in losses) were most common.
- Bank transfers and cryptocurrency were behind more consumer losses than all other payment methods combined, according to that same FTC data.
- According to the 2024 Fraud Insights Report from NICE Actimize, a leading global provider of financial crime and compliance solutions, the volume of fraud attempts is rising, while the amounts stolen via authorized fraud like romance and investment scams are surging.
Beyond bank security measures and monitoring, some of the best ways to protect yourself from bank fraud include strong online safety habits and scam awareness.
How Banks Protect You From Bank Fraud
The Southern Bank and other financial institutions use advanced fraud-monitoring tactics, multi-factor authentication, and encryption of sensitive information to protect customers from bank fraud. Some of the most common protective measures include:
Fraud Monitoring Systems
Banks protect against fraud with 24/7 account-monitoring systems powered by advanced technologies, including artificial intelligence and machine learning. These tools can be used to develop a deep understanding of customers’ purchase patterns and financial behaviors, then use that information to keep a close eye on accounts. When suspicious transactions or other unusual activities are detected, banks can alert the customer or freeze the account until the authenticity of the activities is confirmed.
Secure Payment and Transfer Protocols
To protect against bank fraud during money transfers and other digital transactions, banks use security-enhancing protocols like data encryption and tokenization. These technologies mask credit card numbers, bank account details, and other sensitive information, making it nearly impossible for cybercriminals to decipher this data. Banks may also require multiple authentication steps, such as call-back verification and in-person authorization, to confirm the authenticity of wire transfers or other large transactions.
Multi-Factor Authentication
Multi-factor authentication (MFA), also known as two-factor authentication (2FA), helps protect online accounts from unauthorized access by requiring users to take additional steps to confirm their identity. For example, in addition to providing an accurate username and password when logging into an online bank account, a user might have to provide a one-time confirmation code sent to his or her pre-verified phone number or email address before MFA will allow access. This makes it significantly harder for cybercriminals to use stolen passwords to access users’ accounts.
Account Recovery and Fraud Resolution Efforts
When bank fraud is discovered or reported, banks take steps to thoroughly investigate the incident and attempt to recover any customer losses. If suspected fraud is reported in a timely manner, credit and debit cards are protected against fraud by zero-liability policies that prevent account holders from suffering any financial losses as a result of unauthorized transactions.
Coordination With Law Enforcement
Banks partner with law enforcement officials and consumer protection agencies to provide safeguards against several types of banking fraud, including credit card, debit card, and check fraud. Banks may coordinate with local police departments, the FBI, the USPIS, and the FTC to detect, prevent, and prosecute instances of bank fraud.
How To Protect Yourself From Bank Fraud
In most cases, you can prevent banking fraud by being aware of criminal tactics and being careful about the sensitive information you provide and who you provide it to. Follow these steps to protect yourself from bank fraud:
Recognize Common Banking Scams and Tactics
To protect yourself from bank fraud, you should maintain an awareness of the most common tactics cybercriminals use to steal your personal information and your money, and learn to recognize the red flags for bank fraud. Fraudsters’ methods are always evolving, but common schemes include imposter and investment scams, check fraud, phishing, and romance scams. Regularly review resources such as the FBI’s Common Frauds and Scams web page and the Consumer Financial Protection Bureau’s dedicated web page to better recognize fraud attempts and avoid them.
Practice Good Online Safety Habits
The best strategy for protecting against bank fraud is to maintain best practices for online account safety, including:
- Using strong usernames and passwords, and regularly updating them
- Keeping your anti-virus software up to date
- Enabling multi-factor authentication
These practices can significantly reduce cybercriminals’ chances of stealing your information and accessing your accounts. Monitor bank, credit card, and other account statements for suspicious transactions and activities. By quickly reporting any issues you might find, you can increase your personal levels of credit card, debit card, and check fraud protection.
Be Careful About Sharing Your Personal Information
Always be skeptical of emails, texts, or unsolicited phone calls asking for payments or personal information, as cybercriminals often use these details to access your accounts. If you ever have any question about the legitimacy of a request, reach out to the bank or institution directly using confirmed contact information, such as a phone number or email address from the entity’s official website. Do not follow any links you receive via email or text; instead, access your account by visiting the purported sender’s official website and logging in there.
Use Bank-Provided Security Tools
Most banks (including The Southern Bank) offer a range of security tools to help you protect yourself from bank fraud. These include credit card fraud monitoring, check images for checking accounts, and account alerts and multi-factor authentication for digital banking. Be sure to leverage these tools to keep your accounts and your money safe.
Know the Steps To Take if You’re Targeted
Should you ever discover that you’ve been targeted by bank fraud, contact your bank, credit card issuer, or other applicable financial institution immediately. Account providers can investigate the issue, determine if your account has been compromised in other ways, and advise you on the best next steps to take, including:
- Freezing your account(s)
- Filing a formal report with the FTC
- Putting a credit freeze in place
- Reissuing your credit or debit card with a new number
At The Southern Bank, we pride ourselves on offering friendly, personalized service to all of our customers — and that includes providing guidance when you have questions about any of our banking services. To learn more about our Personal Banking services ranging from Mortgages to Personal Checking, Personal Loans, Savings & Money Market, Certificates of Deposit (CDs) and more, check out the Personal Banking page on our website, or visit one of our local branches for friendly, in-person service with a smile.