Preventing Account Fraud

Many times you hear identity theft and account fraud used interchangeably. Account fraud is a type of identity theft and occurs very often, especially during the holidays. Because of that, I want to cover it all by itself. Account fraud is where someone gains unauthorized access to your existing checking, savings, or credit card accounts and withdraws money or uses them to make purchases. Account fraud can usually only be cleaned up after many hours of anguish, frustration, and with the help of your bank, which is why it is a good idea to try to prevent it if possible. Because banks nearly always refund the money their customers lose to fraud, account fraud is one of the big reasons that bank fees are always climbing.

Rule #1: Never NEVER put checks in your home mailbox! Always use online billpay, take the bill to the blue mailbox, or take it to the post office. Mail theft is a very common and easy way for criminals to get a hold of your checks. They take the check out of the envelope and put it in a special chemical solution that lifts the ink right off the check. (Banks call this “check washing”). Then they write the check to themselves or whomever they please and forge your signature. Worse yet, they take your check and use it to order or print more checks with your routing number and account number so that they can write out as many checks as they want.

Rule #2: Don’t take your hands off your purse or wallet when in public. The most common type of account fraud actually occurs because a wallet was lost or stolen. Criminals can easily use most of the items in a wallet for personal gain.

Rule #3: Don’t ever respond to an email that appears to be from your bank or financial institution. If you believe action is required, type the URL of your bank into the address bar and go from there. Crooks will often create emails that look identical to one your bank might send you saying that it is urgent to click on the link and re-enter your personal information. They often claim that if you don’t your account will be frozen or shut-down. This technique is called “Phishing” and most banks warn about it on their websites and even state that they will never send you an email asking for personal information.

Rule #4: Never give out account numbers, credit card numbers or personal information to someone who is calling you. Your financial institutions should never ask for your private information if they are the ones calling.

Rule #5: Check your account activity often. Even if you follow all of the above rules, there is always still a chance that you could be a victim. The sooner you report a theft, the less damage will be done. Also, since crooks usually hit hard and fast, law enforcement is more likely to be able to catch the thief if you report the crime promptly.

Here are a few ways crooks can get your info that are difficult (if not impossible) to prevent: (please note that these crimes are much less common than those above)

~An unscrupulous employee at a reputable business takes down your credit card information and uses it later.

~A bank employee sells your information to a crime ring (if caught, the employee will never be allowed to work at a bank again).

~A shady business owner uses a special machine to record the information from your credit card’s electronic strip and program it onto his own blank credit card.

I do not point these out so that you will become paranoid, just so you will know how important it is to check your account very frequently and study the activity for any suspicious transactions.