Types Of Mobile Banking Fraud Cases
Overview
The increasing need for digitization is changing everything in industry and finance and banking no longer seem to be an exception. And why not since it has become a faster and more convenient way to conduct business across the globe? But wait a minute, isn’t there a saying - if you want to gain something, there is a price to pay.” So yes, making the most of these advancements also comes with a darker side. Have you ever come across terms like digital banking fraud or phishing, identity theft, loan fraud or card fraud, check fraud, SIM Swap, and whatnot?
Well, the following post focuses on what is digital banking fraud, what are the different types of digital banking fraud, how it happens, and of course, how to protect oneself against digital banking fraud.
What is Digital Banking Fraud?
We all know earlier paperwork and written documentation were given quite an importance which seemed to be time-consuming and quite tiresome unless the services became thoroughly digitized. Quick access and convenience were the two main reasons for using digital banking services but these reasons were not just meant for customers but for the bad guys as well. With the advent of digitization, numerous doors have been opened for criminals to barge in and steal the most confidential information or even money. This is what digital banking fraud is all about.
Criminals at present tend to use different online platforms such as banking apps, and websites to steal money or any important, confidential, and sensitive information. With more and more people turning towards online devices for different tasks such as buying apparel and accessories, and groceries, using mobile banking security solutions designed for quick money transactions entices fraudsters to work insanely to gain unauthorized access to the relevant data and take control of the entire financial system.
The unknown hype behind digital banking fraud
Now much like the two indefinite sides of the same coin, digitalization has also given opportunities for gaining a competitive edge as well as unwanted hype of fraud, whether you choose mobile banking, digital wallets, or any other kind of instant payment. On the bright side, using such tools and devices makes life more convenient and worth exploring but at the same time, it brings an insane amount of risks for everyone including your valuable customers, investors as well as the bank itself.
One of the biggest benefits of considering the digital banking scenario is real-time payments. This can be a boon or a bane since money can be transferred right away but what if it gets stolen while the transfer takes place, tracking such a situation is pretty difficult.
So as a reliable and trustworthy institution, you must come well-equipped with anti-fraud prevention tools and keep a hawk eye on required security features such as strong encryption or multi-factor authentication (MFA). You see there was a time when fraudsters worked solo but not anymore, they seem to operate in highly organized groups that tend to use more and more advanced tools such as artificial intelligence to improve attacks.
It may also interest you to know that there are threats that can come from within the bank itself. Yes no kidding, right from employees to contractors and higher management authorities who have access to all sensitive information, can be a threat as well. Now I am not making an allegation by saying they do all this deliberately but things can go wrong accidentally and what’s more insider information is always dangerous since they have instant access and of course, can cause some serious damages.
How Does Digital Bank Fraud Happen?
As mentioned earlier, digital fraud is when criminals get unauthorized access to all kinds of information be it personal or financial irrespective of the way or means. Down below I would like to mention certain common methods through which digital banking fraud happens.
Malware and Ransomware - I am pretty sure this no longer seems to be a new term, it usually occurs when fraudsters tend to send emails featuring emails with attachments that have the potential to install malware on a bank's or customer's device. Once the malware is installed, it locks the system and a ransom amount is asked to unlock it. On and all, these attacks can be pretty devastating especially if they hit the bank’s core operations.
Account takeover - Another interesting reason for digital fraud is phishing and data breach where criminals can get instant access to someone else’s bank account and once they get in, they can do whatever they want whether it is transferring money or making purchases.
Man-in-the-middle attacks - Another form of digital banking fraud is a man-in-the-middle attack where a criminal usually tends to intercept the communication between a customer as well as the bank. Let’s say, you have an unsecured WiFi network, so it is possible for fraudsters to steal all the sensitive data such as passwords and account numbers.
Phishing and social engineering - This is said when criminals tend to trick people and compel them to give their personal information and bank details such as login credentials, to unsuspecting victims. What’s more, they send an email pretending to be a bank or text message (smishing), or even a call pretending to be customer support (Vishing). Don’t take all this lightly since these emails can appear pretty convincing, compelling one to click on disguised links or attachments.
Is there anything more? Malware can successfully record keystrokes, capture different login credentials, and access sensitive information and all this happens without the user’s knowledge and consent. Moreover, there is a high chance of successfully intercepting communication between users and financial institutions, leading to high miscommunications.
Types of Digital Bank Frauds
Down below I would like you to get acquainted with some of the most common yet crucial types of digital bank frauds, each one of them is a kind and pretty important type of digital banking fraud. So let's take a close look at those.
Phone call scam
The first one is the phone call scam. These are quite known as significant threats where scammers tend to employ deceptive tactics mainly to manipulate individuals into offering sensitive information. So it is very important to recognize such frauds where the bad guys tend to impersonate government agencies, financial institutions, and tech support to deceive victims.
So what you need to do is, be vigilant and recognise these warning signs to protect yourself. Here are certain warning signs of a scam call.
Unsolicited calls from unknown numbers
High-pressure tactics
Request for pretty personal information
Threats or Intimidation
Urgent financial matters
Unrealistic rewards
Remote access to your devices
Caller ID spoofing
Call claiming you have been specially selected
Unusual payment methods
Poor Grammar or Language skills
Request for confidential codes
Claim for unclaimed funds
Unusual background noises
Request for upfront fees or wire transfers
Unusual call patterns
Unable to provide verifiable information
Email scam
The next type of digital fraud to consider is email scams. Now from phishing to credential theft, malware, monetary theft, wire fraud, and supply chain attacks are all part of email scams. Interacting with such scams and providing all relevant user information can lead to long-term issues including identity theft, financial losses, and data corruption.
So how to recognize the wolf in sheep’s clothing? Well, today email scammers have become pretty much skilled in successfully bypassing email defenses. Not just that they can trick end users into divulging information or running malicious code. Further below I would like to mention certain red flags of an email scammer.
Claiming to log in to the website or there will be consequences.
Claims stating that payment information is invalid and you need to log in right away
Claim stating the personal information given is inaccurate and needs to be sent to the attacker
Attaches an invoice for payment
Unnecessary urgency
Receiving a refund and pondering about social security numbers.
Submit private data to obtain free products, coupons or money.
Mobile Number scam
Another notorious menace when it comes to digital fraud banking is mobile number scams. Unfortunately, several people have fallen prey to the traps. Now why do scammers want your cell phone number?
They want to harass you
Steal your identity
Access your online accounts
Money
Here are different ways through which scammers can get your phone numbers.
Social media profiles
Data broker lists
The Dark web
Stolen mail
Shoulder surfing
Phishing scams
Autodialers
So what happens next once they get their hands on your phone numbers?
SIM Swaps
Reroute your number
Target with numerous phishing attacks
Discover more personal information
Hack into your online accounts
Sending malware or spyware
Extortion or blackmail
Google voice scams
Dox you
Fake Website Scam
The next type of digital fraud scam to consider is the fake website scam. As the name implies, here fraudsters tend to create fake websites in such a way that they look like real and legitimate versions of online banks. These websites are mainly created to get hold of your login details and other relevant/confidential information. Here’s a way to identify them.
Too-good-to-be-true scenarios
Fake password login pages
Malicious pop-ups
Fake customer support
Fake package delivery
Bogus booking websites
Online Banking Fraud
Last but certainly not least is online banking fraud. Here fraudsters mainly focus on targeting online banking platforms with several methods such as credential stuffing (using stolen login details) or by exploiting weaknesses in the bank’s online systems. Chances are that these attacks can be automated allowing hitting multiple accounts in one go. Some of the common types of online fraud:
Identity theft
Malicious software
Fraudulent emails
e-Transfer interception
Vishing
Phishing
Automatic Transfer System (ATS)
Fake apps
So basically this is how banking scam works. Now down below I would like to share certain points regarding how to safeguard oneself from such banking frauds.
How to safeguard ourselves from such Banking Frauds?
Use strong passwords
Never share your personal information
Try enabling two-factor authentication
Keep your devices updated
Be cautious with unknown emails and links
Be wary of public Wi-Fi
Avoid visiting unsafe websites & unreliable links
Check your balance statements
Be Skeptical of Unsolicited Calls
Keep yourself well-informed and educated
Don’t reply to fishy emails or text messages
Block lost or stolen cards
Never allow anyone to remotely access your laptop or PC
Conclusion
And we are done for now! Digitization is something that cannot be ignored and nor can these digital frauds so in these cases you need to be extremely careful while dealing with your finances.
Digital banking is itself a revolution, and it somehow turns out to be the most adaptable change. One wrong move can lead to substantial financial losses. So be careful with what you are doing.
I hope you find the following post worth reading. In case you have any doubts or issues, feel free to mention them in the comment section below. Also, I would personally like to request you to share as much as you can and help us out in spreading the word.