Stories of financial fraud are rampant in the media from schemes that involve fake bank text messages to out and out street crime known as “bank jugging” where people rob a person shortly after they withdraw cash from a bank branch or ATM. Over the years I’ve taken notice of the various schemes employed by criminals and have developed some processes and habits that I believe are effective in either preventing fraud or catching on to fraud very early in the process. The first of these habits is simple enough. I have a main checking account that my pay has historically been direct deposited into. From that account I allocate money to savings and investments in other accounts, and pay bills directly out of the account. For that reason it’s a very important account for me. Which is why I check the balance on a daily basis and at least once a week I’ll review recent deposit and withdrawal transactions. Some people may equate checking your bank balance on a daily basis to the activities of one pathetic miser named Ebenezer Scrooge, but there’s a difference in what I’m doing. While Mr. Scrooge was pathologically counting his wealth due to his obsession with money I’m simply checking to ensure that nothing unexpected has occurred. And if something doesn’t look right on a daily basis I can take a look at what happened right away.
It’s important to note that although you are not liable for fraudulent activity on your bank accounts that doesn’t mean that it can’t be hugely inconvenient while you and the bank attempt to sort out what happened and why. Banks also have established time frames for the reporting of fraud and beyond those time frames you may have a lot of trouble reversing fraud. So don’t sleep on your financial accounts, especially accounts that hold money you need to pay day-to-day expenses. It’s also comforting to know that financial institutions have sophisticated systems in place to identify fraud when it occurs, but sophisticated does not 100% guarantee they’ll catch all fraud. Which is why as a customer you need to be aware of your balances as well as the expected ebb and flow of money into and out of your accounts. We usually have regular deposits (like a paycheck or pension payment) as well as regular withdrawals (such as utility bills and those ever growing internet subscriptions) that we expect to impact our balances. Get familiar with what those are. As I mentioned above at least once a week I do a run down of charges to ensure that I understand all of the ones that have occurred. Understanding your banking activity is the first line of defense against potential fraud on your accounts.
I have other measures that I’ll mention briefly as well. I’m lucky enough to have a budget that’s less than my monthly bank account debits so periodically I’ll move money into a savings account at the same bank lest my checking account that has a debit card tied to it grow an unnecessarily large balance. If for whatever reason I should need to deal with an unexpected expense I can use my bank’s mobile app to instantly move money from savings into checking to cover the unexpected expense. If you already have a checking account with a particular institution then setting up a savings account will be quick and easy. The savings account will have no checks and (usually) no debit card associated with it, and you won’t be putting the account information into any online services to pay bills. So theoretically only you and the bank know about that account, thereby adding a layer of security. Establish a conservative baseline for what you need in your checking account and then periodically transfer excess balances into your savings account. Have your bank’s official smartphone app on your phone so that you can manage all transactions and communications through that app. I have a tablet so I also have the bank’s official tablet app as well. Obviously that means securing your digital devices is important as well. So unfortunately with the benefits of technology we also have to deal with the pitfalls. One important piece of advice along those lines is to never loan a phone or tablet with financial apps on it to anyone for any reason. Because there are people (total strangers to you) who will approach you and beg to use your phone because of a supposed emergency. To those people I always give the same answer, “I’ll gladly call the local authorities myself to get you some assistance.” One hundred percent of the time they move on.
We could go down a deep rabbit hole talking about ways to counter fraud on your bank accounts but one measure I will mention involves how you communicate with your bank. Never communicate via an unsolicited call or text message. Scammers use sophisticated spoofing technologies to make a call to your phone show up with the name of a financial institution. Text messages informing people that their account at such and such bank has been compromised and to call a certain phone number to address the issue are very common nowadays. Understand that scammers send out masses of messages referring to the most popular banks in the US knowing that they have a good chance of matching a person to their bank. Any alleged call or text from your bank should be countered with a visit to your bank’s official app (in the case of a call after you’ve hung up immediately) to see for yourself if there is any suspicious activity. If you still have a question, use the messaging built into your bank’s official app to ask a question about fraudulent activity. Alternatively you can use the phone number on the back of your debit card or within the official app to initiate a phone conversation. Never call back the first number that contacted you or follow a contact number sent in a text message. Also, don’t do a web search for the bank’s phone number either as scammers have a way of infiltrating search results. Understand that your bank will never suggest that you provide them with login information or have you download software so that they can control your mobile device or computer.
Financial security in the age of modern technology is much more complicated than it used to be. And while there are many conveniences and positive opportunities there are just as many pitfalls. Just be aware of the basic information provided above (which I’ll summarize below) and happy wealth building!
- Review your main checking account balance on a regular basis to ensure there are no unexpected charges or credits.
- Have a separate savings account at the same bank as your checking account to move excess money into.
- Have your bank’s official apps on your smartphone and/or tablet, and use those to check on any potential fraud or to communicate with the bank.
- Don’t engage in unsolicited contact via phone or text message about your banking activity. If it’s a phone call, hang up and communicate with your bank via their mobile app or a number listed on the back of your debit card.
- Understand that your bank will never ask for your password information or suggest that you download an app that lets them control your mobile device or computer.
In The Midst Of A Journey 