In response to the rise of mobile banking scams, the Consumer Financial Protection Bureau (CFPB) recently published new guidance on unauthorized electronic funds transfers or EFTs. With more people using electronic banking as a holdover from pandemic times, consumers need to be aware of its vulnerabilities and protect themselves from scams. Here’s what you need to know about the risks of mobile banking and how to stay safe.
Unfortunately, though, like all transactions over the internet, mobile banking has some inherent risks. First, hackers can break into a phone and an account to steal money and information. Also, phishing scams targeting people over the phone can trick them into sharing login information with scammers who may hack into the account. Finally, bogus emails and messages appearing to be from your credit union can lead you to install malware on your device unknowingly.
Mobile banking scams can be difficult to spot and are frighteningly prevalent. In fact, according to a report by data science company Feedzai, the first quarter of 2021 saw a 159% increase in banking scams over the last quarter of 2020. This is likely because the volume of banking transactions is returning to its pre-pandemic norm, and many of them are happening online.
How to bank safely online
Instances of online fraud may be mounting, but that doesn’t mean you need to give up the convenience of mobile banking. Follow these protocols for online safety and bank with high confidence:
Use a VPN to hide your IP address. A VPN (virtual private network) will give you a private network, even when you’re using public Wi-Fi, thus preventing scammers from tracking and hacking your mobile device. It’s important to note that some VPNs can work so well that your own credit union won’t recognize you, so be sure to choose one that provides each user with a designated proxy IP. This enables select accounts to recognize the user while providing protection from hackers.
Always choose multi-factor authentication. Most money apps will require this, but if your chosen app allows you to make this choice, be sure to say yes to multi-factor authentication.
Never share your password or save it to your device. All of your passwords should be confidential, but the password you choose for an online banking app must be top secret. Don’t share your password with anyone. Follow suggested guidelines for choosing a strong password, including alternating between uppercase letters, lowercase letters, numbers, and symbols, and choosing a unique password you don’t use elsewhere. Also, choose a security question that cannot be answered by searching through the personal information you post on your social media platforms.
Brush up on your knowledge of scams. It’s important to keep yourself updated on the latest banking scams and know how to recognize a scam if you’re targeted. Never answer a text or email that asks for your account details, even if it appears to be from your credit union. Maps will never ask for account details, passwords, or access codes.Finally, always be wary of unsolicited phone calls and banking alerts.
Protect your phone. With the wealth of sensitive information it holds, a smartphone should be protected just like a desktop and laptop computer. Consider installing an antivirus app on your phone as well as a location-tracking app so you can find your phone if it gets lost. Be sure to lock your phone after using it, log out of the mobile banking app when you are done, and always keep your phone in a safe place.
Mobile banking scams are on the rise, but by simply following the tips shared above, you can use your phone to bank with confidence, knowing your money and your information are safe.