Account fraud is a crime where criminals steal money or other valuables from people’s bank accounts. It’s a very serious issue that can result in a huge loss of revenue and reputational damage to a financial institution.
The good news is that there are many ways to prevent account fraud from happening. There are also things that customers can do to protect themselves from being the target of this kind of fraud, such as following basic best practices for identity theft prevention and enabling identity theft protection with Experian IdentityWorks(sm).
Preventing Account Takeover Fraud
A growing trend is account takeover, where fraudsters gain access to an existing bank account using phishing, malware or other means. The thief can use that account to withdraw funds, apply for credit cards and checks blanks or other items, and open new bank accounts in the victim’s name.
This type of account fraud is a major concern because it is very difficult to detect and can cause substantial financial losses for victims. It is important for banks and other institutions to implement a system that can monitor new account fraud closely, especially in the first 30 days after an account is opened.
Some methods for preventing account fraud include implementing an automated password check into user registration that cross-checks each attempted password against a database of previously exposed credentials. If the password is discovered to have been compromised, it is blocked and a reset is required before access can be granted.
OneSpan Risk Analytics offers a risk-based anti-fraud solution that includes these features to help financial institutions detect new account fraud at the earliest possible stage. It monitors a wide range of new account behavior, including changes to an account profile; adding a beneficiary or payee; device registrations across all channels; login times and transactions. It even identifies and flags dormant-to-warmed-up accounts, high transfers in and out of an account, as well as a number of other factors that can point to new account fraud.
In addition to preventing account fraud, it’s important for financial institutions to implement a system that can automatically block suspicious activity by preventing people from using an infected computer or mobile phone. In some cases, hackers can use key-tracking software to track a person’s devices or use public WiFi to find their login details.
Another method of preventing account fraud is to secure each individual bank account with a complex password. This is especially important if you are using a shared password for all of your accounts. It’s also recommended to turn on two-factor authentication where available, which requires a unique username and password combination, and a text message or email to verify the identity of a user.
It’s also important to regularly update the operating systems and other applications on all of your devices, so that any malware or other threats don’t infiltrate your device. Ensure that your devices are protected by antivirus software, and avoid downloading apps or other programs you don’t know or trust.