Criminals are becoming much more sophisticated with financial fraud as new technologies emerge
Financial fraud used to be fairly simple, but with the recent rise of contactless payments and online banking, everything has changed.
As a result of the pandemic, financial fraud has evolved, and according to UK finance, a total of £753.9 million was stolen in the first half of 2021.
In 2020, the British banking industry stopped £1.6 billion of unauthorised fraud. This is equivalent to stopping £6.73 in every £10 of attempted fraud.
Financial fraud is a serious issue that occurs more frequently than you might think.
Financial fraud is defined as intentional deception that results in monetary loss.
It is critical to note that these fraudsters are not cunning individuals, but rather ruthless organised criminals armed with cutting-edge technology.
For the most part, fraud appears to be a random event. Someone falls victim to a scam, and we are left to wonder how this happened.
The truth is that fraud occurs on a daily basis through a variety of means. Understanding how financial fraud occurs is the first step toward preventing it. Let’s go over some of the approaches.
Identity theft occurs when someone uses your personal information to open credit cards, apply for loans, or steal money from your accounts without your knowledge.
Identity theft can have serious implications in a person’s life. Consider the following example:
Phishing is a fraudulent attempt to get sensitive information such as usernames, passwords, and credit card info through electronic communication by pretending to be trustworthy.
Bank transfer scam also known as Authorized push payment (APP) scam or Social engineering fraud occurs when someone convinces a victim to make an electronic payment to the scammer.
The most common scams involve someone impersonating HMRC and asking people to pay a tax bill they don’t owe, or posing as a bank asking you to move money to a “safe account.”
This is when someone accesses your card information without your permission and uses it for their own gain
The best defence against fraud is knowledge. Here are some ways to prevent financial fraud from happening to you:
It’s easy to dismiss that sinking feeling in your stomach when someone makes you an offer that seems too good to be true, but that feeling could save you a lot of money.
If you have a hunch that something isn’t quite right about an offer, or if you’re under pressure to make a quick decision, it could be a sign of a scammer at work.
Criminals frequently employ high-pressure tactics to obtain what they desire.
Don’t agree to anything right away; instead, gather as much information as possible and consider it over the course of the night.
Check Your Bank Statements
Every month, review your bank statements for any suspicious transactions.
This enables you to detect and report any fraudulent activity on your account. Contact your bank to have the transaction reversed especially if you used a credit card.
Check Your Credit Report
Examining your credit reports from each of the three credit bureaus (Experian, Equifax, and TransUnion) will assist you in identifying any errors or fraudulent activity on your account.
If you don’t have a shredder, tear the documents into small pieces so that they can’t be reassembled.
It’s incredible how much information can be gleaned from old bank statements, loan documents, and credit card offers.
Change your passwords on a regular basis, and use a unique one for each account.
Avoid using birthdays or family names because hackers can easily guess them from your social media accounts.
Utilize a password manager. These tools generate strong random passwords for you and help you keep track of them all without having to write them down or remember too many
Use two-factor authentication whenever possible, especially when dealing with sensitive information online.
Never reveal your PIN or any other security information to anyone.
By combining letters, numbers, and special characters such as exclamation mark from a sentence, you can create complex passwords that are difficult for a computer programme to crack.
Don’t leave them anywhere they could be discovered. Don’t give out your PIN numbers or online passwords over the phone to anyone.
Also, avoid using the same password for multiple accounts or websites; if a thief obtains just one password, there’s no telling how much damage they can cause.
When shopping online, look for the lock icon on websites that begins with “https://” before entering your personal information.
That means the site is secure and encrypts any data that passes through it.
Yes, you should be cautious when disseminating information on social media and also be cautious about who follows you and who follows you.
Don’t post photos of your boarding pass or ID card on social media.
Criminals also use social media and digital messaging services to promote bogus investment opportunities including cryptocurrency, Forex etc
You connect to a public WiFi network, such as one in a coffee shop, library, or hotel, and begin checking your email or banking account.
That’s when a hacker intercepts your signal and steals passwords, credit card numbers and other important information.
While a virtual private network (VPN) can help secure your connection, it’s even better to avoid using public Wi-Fi altogether.
Even the most technologically savvy people can become victims of financial fraud. Fraudsters are constantly coming up with new ways.
By remaining vigilant, you can reduce your chances of becoming a victim of financial fraud.
