6 ways to reduce your risk of financial fraud

By Benjamin Salisbury

As you shop, bank and socialise online, you need to be on your toes when it comes to security. Every step you take online may be visible to criminals if you don't take precautions to keep your information secure.

"Lenders continue to make significant strides in the fight against fraud and safeguarding their customers -- particularly against identity theft," Nick Mothershaw, UK&I director of identity and fraud at Experian, said in an emailed response to questions. "But as more consumers access and apply for financial products across multiple channels, including online and mobile, fraud has also evolved accordingly."

Mothershaw provided March 2015 figures from Experian that support his claim. The figures show that online credit card fraud is rising, with 44 card applications per 10,000 being detected as fraudulent in Q4 2014, up from 39 cases per 10,000 cases in Q4 2013.reduce-risk-online

Staying safe
Because the internet has become ubiquitous in our lives, it is easy to be complacent about what actions we take online, such as using the same password for multiple accounts, not logging out of accounts and putting all sorts of personal information on social media profiles. However, you can reduce the risk by following simple steps to make sure your online financial activities don't put you at risk:

1. Be careful what you post online. You wouldn't leave financial statements lying about in a public place, but if you don't add security settings to your social media accounts, that is effectively what you are doing. Make sure to set your privacy settings to high so only trusted friends and contacts can see your information, because your personal information can be as valuable as financial data to a fraudster.

"Many individuals also don't realise how easy it can be for fraudsters to use personal information available on social media sites to obtain their identity and accounts in their name," said Laura Barrett, representative for Equifax's consumer affairs department, in an emailed response to questions. "Fraudsters can need as little as three pieces of personal data to begin fraudulent activity."

2. Be aware of potential scams. They come in a variety of forms and from senders pretending to be valid organisations. Check the email address carefully, hover over links to check they are correct and never open attachments you are unsure of. Be especially wary of emails requesting login details or financial information. If you receive such an email, call your bank or credit card issuer (or whomever the email appears to be from) and verify that the message is legitimate.

3. Use quality security software to lock your devices, networks and online accounts away from prying eyes. Keep up to date with all software updates as cybercriminals can more easily access accounts that are not protected with the latest anti-virus software.

4. Be password-savvy. It is tempting to use the same password for separate online accounts but if someone discovers it, they can then access all your online accounts. Make sure you don't use obvious passwords, especially for your online bank or credit card accounts, and change passwords regularly.

5. Make sure you fully log out of online accounts. Don't just close the browser window when you're done checking a financial account. Sign out. Also, uninstall applications and software that you no longer use. You may have changed bank accounts, which means you no longer need any software relating to your previous account, or you may have obsolete eBay, Amazon or PayPal accounts. Get rid of them because they hold your personal and financial information.

6. Keep up with your credit report. You can do this via a free 30-day trial with one of the major credit ratings agencies, such as Experian or Equifax. Looking regularly at your report will allow you to tell whether any fraudulent behaviour has occurred and adversely affected your credit rating. You can then take steps to put it right by contacting the lender or organisation the charge relates to and getting them to make the correction.

See related: Protect yourself from fraud while shopping online, Stop debt collectors digging up dirt on social media

Published: 17 March 2015