5 ways to protect your bank account from fraud and identity theft

According to the Federal Trade Commission (FTC), bank fraud jumped 14% in 2023. With technology, including AI, making it easier for criminals to target unsuspecting consumers, protecting your bank account from fraud has never been more crucial.

The key to protecting yourself is to take practical measures to prevent bank fraud and know what to do if you become a victim.

Common scams to watch out for

Fraudsters are getting creative, but here are some common tactics they use:

• Phishing attempts: Fraudsters often use fake emails, texts, or calls, mimicking your bank to steal login or other personal information.
• Malware and keylogging software: These programs steal your information by gaining access to your device.
• Card skimming devices: Hardware installed on card readers, especially at gas stations, to capture card data.
• Peer-to-peer payment scams: Tricks to get you to send money using a fake app under the guise of verifying your account.

Phishing and smishing (SMS phishing) are some of the most common forms of identity theft and bank fraud. These scams trick victims into sharing personal information through fake texts or websites. Synthetic identity fraud, which involves creating new identities using a mix of real and fake information, is also a growing concern.

5 ways to prevent fraud and identity theft

Here are five ways to protect yourself from bank fraud and identity theft.

1. Strengthen your account security

Your first line of defense is a strong, unique password for each account. Follow these tips:

• Avoid obvious choices like "1234" or personal information like your name or birthdate.
• Use a different password for every account.
• Set up two-factor authentication wherever possible.
• Monitor your accounts regularly and set up automated alerts for suspicious activity.

2. Protect your personal information

Your bank accounts are private and fragile information, so be careful where you access it. While we have 24/7 access anywhere we have an internet connection, it’s not always safe.

Use these precautions to protect yourself:

• Only share personal information on secure, legitimate sites.
• Never give out information to unsolicited callers — if in doubt, hang up and call your bank directly.
• Avoid accessing bank information on public Wi-Fi networks.
• Shred financial documents before disposing of them.
• Check your credit report at least once yearly, if not more frequently.

3. Secure your devices

Your devices provide easy access to your banking information, but if you don’t keep them updated and secure, it could provide unauthorized access to your accounts. Before using your devices to access private information, consider the following:

• Set up automatic updates: Let your devices and apps automatically update so you never miss important updates that could protect your security.
• Use antivirus software: Use updated and well-known antivirus software to ensure your information is safe and that you are updated on any new threats.
• Don’t click on links: Avoid clicking on links, no matter how urgent they seem. Verify the sender first.

4. Practice safe online and mobile banking

Before banking online or on your mobile device, determine what security features you have. Ask the bank what security measures they offer, and in addition, do the following to protect yourself:

• Always log out of banking websites or apps after using them.
• Don’t save logins on shared devices, even if they are with family members.
• Use a password manager to store your passwords securely.
• If you notice unauthorized activity, report it to your bank immediately.
• Forward suspected phishing emails to [email protected].

5. Educate family members about cybersecurity

Make sure everyone, from kids to grandparents, understands the basics of cybersecurity:

• Teach children about online safety and the importance of keeping personal information private.
• Help older family members recognize common scams. In 2022, the FBI reported 88,262 fraud complaints from people over 60, resulting in $3.1 billion in losses.

What to do if you’re a victim of fraud or identity theft

Despite your best efforts, you might still fall victim to fraud. Don't panic — just act quickly. Here’s what to do:

If you’re a victim of fraud

• Contact your bank immediately to report the fraud.
• Request to freeze or close affected accounts.
• Change all passwords and PINs, even for unrelated accounts.
• File a police report, especially for significant losses.
• Keep detailed records of all fraudulent transactions.
• Follow up with your bank and monitor your account closely.

If your identity is stolen

• File an identity theft report with the FTC at identitytheft.gov.
• Contact one of the three credit bureaus (Experian, Equifax, or TransUnion) to initiate a fraud alert on your credit reports. They’ll notify the other two.
• Consider placing a credit freeze for stronger protection. This prevents anyone, including yourself, from touching your credit, so you must unfreeze it when you want to apply for something.
• Notify other relevant organizations like the Social Security Administration or the IRS.
• Close any new accounts opened without your authorization as soon as you find them.
• Dispute any fraudulent charges or accounts immediately.
• Update passwords for all your online accounts, even those unaffected.

How to recover from financial losses

According to the FTC, consumers lost $10 billion to fraud and identity theft in 2023, with investment scams alone accounting for $4.6 billion. Here’s how to bounce back:

• Work with your bank's fraud department: Contact your bank’s fraud department to understand their procedures and what it takes to recover from the loss.
• Know your rights under federal law: The FTC outlines your rights, including placing fraud alerts, removing fraudulent information from your credit report, and accessing free credit reports.
• Deal with debt collectors: The FTC states that debt collectors cannot pursue you for fraudulent debts or report them to credit bureaus. If you feel your rights have been violated, contact the FTC.

Frequently asked questions

The bottom line

No matter how cautious you think you are, bank fraud and identity theft can happen to anyone. Stay informed about the latest threats and know how to protect yourself by having unique passwords, not sharing private information, and being wary of clicking unknown links or providing information over the phone.

If you become a victim of bank fraud or identity theft, file a police report immediately, contact your bank, and file a report with the FTC to have all the proper protections to avoid further damage.