One of the key ways to guard against fraud is awareness – from keeping track of what should be coming into and leaving your bank account, to recognizing a scam without falling for it. From massive multinational businesses managing hundreds of accounts in different countries and currencies to individuals keeping their savings secure, anyone can be the victim of fraud.
Some of the best ways to prevent fraud are having systems in place that will deter fraudsters, minimize the risk to which you are exposed, and detect any unusual activity in your bank accounts. Financial institutions will also offer additional fraud prevention strategies to help you identify potentially fraudulent transactions, so it’s important to make the most of these as well.
There are numerous ways that scammers will try to trick people into giving them vital information about their bank accounts, or personal details that make it easy to access their passwords or other security details. These include:
- Phone Scams – individuals are often targeted by phone scammers who use a variety of tactics to try and gain access to their money. Some will pretend they are processing a store refund or tax rebate; others will claim that the individual owes money, creating a sense of urgency in getting the matter resolved.
- Email Fraud – some scammers will send out emails that appear to be from legitimate companies, trying to entice customers to use a website that will allow fraudsters access to their accounts. Many will use fake email addresses and authentic-looking links to trick customers into handing over their details.
- Online Fraud – from fake government department websites that appear to have all the branding of their legitimate counterparts to retail sites that take money without dispatching any goods, there are plenty of ways for fraudsters to use the internet to trick both individuals and businesses out of money.
- Check Fraud – from changing the details on a check that has been issued legitimately to copying or scanning checks to make repeat payments, check fraud is a particular concern for businesses.
- Invoice Fraud – fraudsters will sometimes issue fake invoices to businesses for products or services that were never supplied in the hope that they will pay without checking. Some invoicing scammers will issue an official-looking notification about a chance of banking details diverting legitimately owed funds into illegitimate accounts.
How To Avoid Fraud
The impact of fraud can be devastating, wiping out life savings or rendering businesses insolvent, so it’s important to do everything possible to ensure that you are minimizing the risks of being a victim. Both businesses and individuals can use similar methods to ensure that they aren’t caught up in fraud, including:
- Check who you’re speaking to – if you receive an incoming call claiming to be from your bank, you should always insist on calling back on a number that you can verify. Some fraudsters can ‘spoof’ numbers that appear legitimate, so it’s important to make the call yourself and check that your bank’s usual security protocols are in place.
- Check websites to ensure they are legitimate – whether you are searching for information on tax rebates or retail sites, be wary of clicking links that aren’t familiar. Ensure that government sites conform to web address protocols, check that the URL is secure by ensuring that it begins with ‘HTTPS’ and any payment pages should have a padlock symbol as well.
- Don’t be pressured – some fraudsters will threaten their targets with late payments, additional fees, or other financial penalties as reasons to make a payment quickly. This is to try and reduce the checks you will do and increase the chances of you catching them out in their scam.
These rules apply to both businesses and individuals and are an important part of staying safe. Businesses should have strong fraud prevention policies in place so that all staff members know how important it is to check and double-check any transaction that they process to ensure that the payment is legitimate and that it is going to the correct account.
By staying aware of the latest types of scams, updating policies when new methods of fraud become popular, and keeping detailed records of all transactions, it is possible to minimize the potential for being a victim of fraud.
