Protect your bank accounts and cards from fraud
Tuesday, 01 February 2011 01:55
By Kate Saines
There's nothing worse than checking your bank statement to find a lower-than-expected balance.
Except, perhaps, opening your bank statement to discover a lower-than-expected balance because fraudsters have been at work stripping your account of every last penny.
In 2009, according to figures from Financial Fraud Action UK (FFA), card fraud accounted for £440.3 million worth of losses on UK cards.
Although this figure was down by £170 million on the previous year, it goes to show just how lucrative the fraud business is and how high the potential loss is to us.
There are a variety of ways we are being targeted - at ATM machines, whilst using chip and PIN machines and online.
Thankfully, there are also plenty of ways we can protect ourselves and, if we do become victims of financial fraud, prevent the loss from being too great.
Here's how.
Using cards at ATMs
We are probably all aware of card trapping devices, which are fitted to the slots in ATMs to retain our cards, and skimming devices which are also fitted to ATMs by fraudsters to read the magnetic strip on our cards.
But, according to the FFA, a large majority of cash machine fraud is still down to people simply not keeping their PINs safe and secure. Believe it or not, many fraudsters are stealing our cash after stealing wallets or purses and finding slips of paper with PINs written down.
So, it's important to make sure you do not compromise your details.
Thanks to legislation, victims of fraud should not suffer any financial loss – most banks will re-compensate. However, this does not apply if it is found you have acted fraudulently or without reasonable care, for example by writing down your PIN.
If you are worried you'll forget your PIN try changing it to a memorable number.
So-called shoulder-surfing is also a common technique used by fraudsters. This is where criminals hover behind card users at cash machines in order to see their PIN and then use distraction methods to steal their card.
Nationwide, which has produced a series of videos to help customers guard against fraud, advises people to make sure they use their hands to cover the PIN reader when using machines.
Make sure you are aware of people standing around you, and always put your card straight back into your purse and wallet after it is ejected from the ATM.
Using your cards in stores
The reduction in card fraud loss has been attributed partly to the launch of chip and PIN machines.
A spokesperson for the FFA said: "The types of fraud that [chip and PIN] was brought in to tackle have dropped significantly.
"Fraud on lost and stolen cards is now at its lowest level for two decades. Losses at UK retailers have fallen by 67 per cent since 2004; lost and stolen card fraud fell by 58 per cent between 2004 and 2009."
However, we are still being urged to be cautious when shopping in stores, restaurants and other places accepting cards.
Nationwide says we should never let anyone take our cards away from us. And the FFA urges us to shield the reader using our free hand and bodies when typing our PINs into these machines.
If you think someone might have caught sight of the PIN, change the number immediately at a cash machine or by contacting the bank.
Banking and using cards online
While criminal activity has fallen in other areas, it is increasing online. FFA figures show online banking fraud losses were up in 2009 by 14 per cent to £59.7 million.
It's no wonder, as FFA figures also show more than 33 million adults in the UK now use the internet to access their bank accounts or shop online.
And there are a number of threats. Nationwide flagged up just a few, including a method called 'phishing' where unsolicited emails are sent asking recipients for security details.
The advice is to ignore these emails and certainly do not respond.
Malware is another online banking threat. It's a type of virus that runs without your knowledge and could pick up your keystrokes, recording your bank details.
Installing decent anti-virus software, a firewall and spyware onto your computer will reduce the likelihood of these types of infection.
Never visit your bank's website via a link from another website, always type the address directly into the web browser.
If you are using shared-access computers, for example in an internet cafe, or public wi-fi connection, be especially careful.
If you are shopping online you are urged to register your cards with Verified by Visa or MasterCard SecureCode, if prompted.
The UK Cards Association also suggests looking for the padlock symbol on your screen to ensure that website is reputable and to always log out after making a transaction.
It also advises online shoppers to only deal with websites they trust, to be wary when buying from overseas sites, and never to go to a website and enter personal details if they have been directed there via a link.
You should check receipts against your statement, it says, and also consider using a credit card for purchases between £100 and £30,000. This is because credit card companies can provide additional protection through section 75 of the Consumer Protection Act.
Find out more about how to shop safely online.
Extra protection
We've already mentioned how we should not suffer any financial loss if we have been victims of fraud.
Most banks will investigate if money has been stolen from your account, and should be able to replace the cash after a set time period – 30 days for example.
Meanwhile, section 75 provides stronger protection for those whose credit card has been used fraudulently.
But if this is not enough, you can pay for insurance to cover your cards. Many of the packaged current accounts available today include card cover as part of the deal.
A report by independent financial research firm, Defaqto, last year revealed 49 per cent of these 'added-value' accounts included card protection cover.
These accounts usually come with a fee ranging from £5 to £40 per month. While there are likely to be other benefits in the package, it's worth weighing up whether a fiver a month is worth it for additional protection.
Among the advice in Nationwide's series of online videos on fraud, experts urge us to keep bank details safe by shredding all paper documents received and to take care when giving sensitive data over the phone.
Peter Corrie, who is responsible for financial crime prevention at Nationwide, said: "Our website is full of useful advice and these videos really bring the topic to life and show people what to look out for.
"Most of us know we must never share our PIN and must keep our cards safe, but there are a range of other ways we can all help protect ourselves from fraud."
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