Concerned that your bank account might not be as secure as you thought? You’re not imagining it. A new study reveals that consumer bank accounts are increasingly being targeted by scammers. The good news, however, is that banks are stepping up to help protect your money—and there are steps you can take to protect yourself.
According to a study from J.D. Power, nearly 30% of bank customers experienced fraudulent activity on their accounts in the past year. Fraud ranged from unauthorized purchases and stolen funds to customers unknowingly sending money to scammers through peer-to-peer (P2P) payment apps.
Fraud is spreading fast, fueled by the growing popularity of P2P apps and the rise of digital, impersonal transactions. As Jennifer White, senior director of banking and payment intelligence at J.D. Power, points out, “You would never hand $100 to a stranger, but that’s essentially how P2P payments work.”
What makes matters worse is the growing number of data breaches—like the National Public Data breach—that expose billions of Social Security numbers and other personal information. Armed with this data, fraudsters can pose as your bank and trick you into revealing even more sensitive details.
“It’s easy to fall for these scams because they have so much personal information about you,” explains Paul Benda, executive vice president for risk, fraud, and cybersecurity at the American Bankers Association.
Fraud Is Happening More Often—and It’s Happening Again
The J.D. Power study, released on November 7, found that 29% of bank customers were victims of fraud in the past year. Even more concerning, 45% of those affected had multiple fraud incidents. As White states, “It’s not just happening once.”
Young people, particularly those under 40, are especially vulnerable to fraud, despite being digital natives. While they are tech-savvy, they also use P2P payment apps more frequently, making them easy targets for scammers.
One bright spot: customers are generally satisfied with how their banks handle fraud cases. In fact, 92% of consumers say they’re likely to continue using their bank after it successfully resolves a fraud issue. Only 17% reported having a negative experience after being defrauded.
Banks Are Fighting Fraud—But Are You?
Banks are investing billions each year to protect their customers from fraud. The J.D. Power study found that 46% of bank customers reported that their bank had prompted them to take steps to secure their accounts in the past 90 days. However, many consumers are not doing enough to protect themselves. For instance, a quarter of customers did nothing at all to secure their accounts in that same time period.
The most common measure taken was reviewing recent transactions for suspicious activity, but this is a reactive, not proactive, step. Experts say that merely checking your transactions doesn’t fully protect your account.
Simple Steps to Better Protect Your Bank Account
While it may feel like keeping up with fraudsters is a losing battle, there are steps you can take to better protect your bank accounts:
1. Visit Your Bank’s Security Center
Many banks offer a “security center” on their website or mobile app. This is a dedicated space where you can review and manage your security settings. It’s a good place to start when looking for tools to protect your account.
2. Use Strong, Unique Passwords
Avoid using easily guessable information, like birthdays or pet names, for your passwords. Use strong, unique passwords for each of your accounts, and consider using a password manager to generate and store them securely. If you get an alert that your password has been compromised, change it immediately.
3. Set Up Alerts
Most banks allow you to set up alerts for various types of account activity, such as changes to your contact information, large transactions, or attempted logins. These alerts can help you spot fraud early and take action.
4. Enable Two-Factor Authentication (2FA)
Two-factor authentication adds an extra layer of security by requiring you to verify your identity with something you know (like a password) and something you have (like a code sent to your phone). Many banks now offer biometric verification, such as fingerprint or facial recognition, to ensure it’s really you.
5. Update Your Banking App
Always make sure your banking app is up to date. Updates often include security improvements that can protect you from the latest threats. Most apps will notify you when an update is available.
6. Go Paperless
Switching to paperless statements eliminates the risk of sensitive financial information being intercepted in the mail. Plus, it’s safer and more convenient.
7. Guard Your Smartphone
Your phone is essentially a gateway to your bank accounts, so treat it carefully. Don’t leave it unlocked and unattended, and be cautious about sharing it with others, especially when making payments. Always complete transactions yourself rather than handing your phone to someone else.
8. Be Cautious of Unsolicited Messages
If you receive unexpected emails, phone calls, or texts claiming to be from your bank, be suspicious. Common red flags include unsolicited links, urgent language, attachments, requests for personal information, or pressure to send money via a payment app. If you didn’t expect the message, don’t click any links or share sensitive details.
Stay One Step Ahead of Scammers
With global scam losses topping $1 trillion this year, fraud is clearly a growing threat. However, by taking a few simple steps to secure your accounts, you can greatly reduce the risk of falling victim to fraud.
While banks are working hard to protect your account, it’s important that you also take responsibility for safeguarding your personal and financial information. By following these best practices, you can stay one step ahead of scammers and help ensure your bank account remains secure.
