How to report bank fraud: Essential tips for safeguarding your assets from fraud
Bank fraud is an increasingly common issue that can affect anybody. This guide will help you understand bank fraud, spot warning signs and report fraud effectively, ensuring your assets are properly safeguarded.
This guide will walk you through understanding bank fraud, spotting the warning signs and taking action to report fraud effectively, ensuring your assets are properly safeguarded.
What is bank fraud?
The definition of bank fraud refers to any deceptive or illegal activity that targets financial institutions to steal money, assets or personal information. It involves any fraudulent activity aimed at tricking individuals or banks into surrendering funds or sensitive data.
Some examples of common types of bank fraud include:
- Check Fraud: Forging, altering or cashing checks without authorization to drain funds from an account.
- ATM Skimming: Using hidden devices on ATMs to steal card information and clone credit or debit cards.
- Wire Transfer Fraud: Manipulating victims into wiring funds to fraudulent accounts, often by impersonating trusted contacts.
- Identity Theft: Opening bank accounts, applying for loans or obtaining credit cards using someone else’s personal information.
- Phishing Scams: Sending fraudulent emails or messages that mimic a bank to steal passwords, PINs or account numbers.
Understanding these types of fraud in banks will help you remain vigilant and proactive. For a deeper look into the most common types of bank fraud, refer to Datavisor’s article on the 12 Most Common Types of Bank Fraud.
How to spot bank fraud
Detecting bank fraud early is the most effective way to prevent further damage to your finances. One of the clearest warning signs is noticing unauthorized transactions on your account, such as unexpected withdrawals, purchases or transfers that you don’t recognize. These irregularities often indicate that someone has gained access to your banking information.
Suspicious communications are another major red flag. Be wary of emails, texts or phone calls asking for sensitive information, especially when they come from unverified sources. Scammers often create a sense of urgency in these messages, pressuring you to share personal details without giving you time to think it through.
Unexpected loan applications or credit approvals are also indicators of potential fraud. If you receive loan documents or notices for applications you didn’t initiate, it’s a sign that someone may be using your identity. Similarly, an unexplained denial of credit can indicate attempted fraud or compromised credit history, as fraudulent activity can harm your credit score.
If you spot any of these red flags, it’s critical to act immediately. Report any suspected fraud to your bank to ensure your accounts remain protected and secure.
Steps to report bank fraud
In the case that you suspect fraudulent activity, ensure that you follow these essential steps to effectively report bank fraud:
- Contact Your Bank Immediately: Reach out to your bank’s fraud prevention department to report the issue. Provide details of the fraudulent activity, including unauthorized transactions, communications, accounts and any other relevant information. Your bank may freeze the affected accounts, issue a new card or investigate further before acting. Reporting fraud to your bank will initiate the process of investigation, as well as potential recovery of funds and in turn maximize your chances of getting your money back.
- Monitor Your Accounts Closely: Ensure that you set up alerts for all your accounts to automatically monitor and detect suspicious activity. Most mobile banking apps allow for notifications to be configured on your phone, flagging transactions, suspicious activity and other key alerts that may indicate fraudulent activity. Additionally, regularly check your statements for any further signs of fraudulent activity.
- Place a Fraud Alert on Your Credit Report: Placing a fraud alert with one of the three major credit bureaus, Equifax, Experian or TransUnion, can be another effective method for detecting and preventing fraud. A fraud alert helps prevent others from opening new accounts in your name by requiring all businesses to check with you directly before opening any new accounts in your name. This can be an extremely valuable tactic if you are currently dealing with ongoing fraudulent activity and/or fraudulent account requests.
- File a Police Report: Filing a police report provides an official record of the attempted fraud and more importantly helps your bank take action to recover your losses. It is worth noting that your bank may even require a police report before beginning the resolution of any fraudulent disputes. Ensure that you share the police report with your bank, credit bureaus and relevant authorities during their investigation.
- Report the Fraud to National Agencies: It is also imperative to report bank fraud to appropriate agencies, such as The Federal Trade Commission (FTC), Local financial regulators or consumer protection authorities, and other relevant National Agencies as listed on the FDIC.
It’s important to note that these National Agencies will not resolve your individual report; however, they will use your report to investigate and bring cases against fraud, scams and bad business practices. This can help shut down scammers and fraudsters, preventing repeat fraud attempts from the same people. For incidents involving wire transfers, contact the wire transfer service (e.g., MoneyGram or Western Union) to reverse the transaction, if possible. - Check Your Credit Report for Errors: Request a free credit report from annualcreditreport.com and look for any unfamiliar accounts, inquiries or discrepancies. Identifying and reporting these errors to credit bureaus can help safeguard your credit score, flag any potential identity theft cases, as well as stay informed about your overall financial health and payment accuracy.
How to prevent bank fraud
Prevention is the best defense against bank fraud, and staying vigilant is key to protecting your assets. Start by reviewing your account statements regularly. By monitoring your transactions closely, you can quickly identify and report any suspicious activity before it escalates.
Adding extra layers of security is another effective measure. Enable two-factor authentication (2FA) on your online banking accounts to protect your information. This additional verification step makes it much harder for unauthorized users to access your account. Additionally, ensure you use strong, unique passwords that are not easily guessed to minimize the risk of account breaches.
Be cautious of phishing scams, which often appear as emails, links or phone calls requesting sensitive information. Always verify the source before sharing any personal or financial details. Scammers frequently disguise themselves as legitimate organizations to trick you into revealing passwords or account information.
Finally, take advantage of online fraud prevention tools and resources provided by your bank or trusted financial institutions. Many banks offer notifications and tips to help detect fraudulent activity early, empowering you to stay informed and proactive in safeguarding your accounts.
By practicing good habits and using available fraud prevention databases, you can reduce your risk of falling victim to banking scams. Refer to the OCC’s Fraud Resource guide for additional resources, news, and a list of Regulatory and National Agencies.
For further reading on fraud prevention, refer to our article on the Best Practices for Keeping Your Online Account Secure.
For more general cyber security tips to ensure that you are keeping your data safe, review our article on Cyber Security and Online Banking.
Protect yourself against bank fraud today
Bank fraud is a serious crime that requires prompt action to minimize potential damage and maximize the recovery of any lost funds. Learning how to identify the signs of fraud, understanding how to report bank fraud, and adopting fraud prevention practices can help you safeguard your financial assets effectively.
If you suspect fraudulent activity, contact your bank, credit bureaus, and the relevant authorities immediately. Staying informed and proactive is your best defense against evolving threats in the financial system.
Schedule an appointment with Associated Bank today to learn more about how you can protect yourself and your assets today by staying alert, reporting fraud promptly, and using trusted tools to keep your financial accounts secure.
