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In 2024, personal banking faced several significant frauds and scams that impacted consumers globally. Notable among these were:
Smishing (SMS Phishing) Attacks: There was a notable increase in smishing attacks, where fraudsters sent deceptive text messages posing as legitimate banks to extract sensitive information from consumers. Authorities issued warnings about such scams, highlighting the sophistication of these fraudulent messages that often mimicked genuine bank communications.
How to Protect Yourself from Smishing Attacks:
• Do not click on links or respond to text messages that claim to be from your bank. Banks generally avoid sending sensitive requests via text.
• Contact your bank directly through official channels if you receive a suspicious message.
• Install spam and fraud detection tools on your phone.
Payment Platform Frauds: The U.S. Consumer Financial Protection Bureau (CFPB) filed a lawsuit against major banks—JPMorgan Chase, Bank of America, and Wells Fargo—alleging their failure to protect consumers from widespread fraud on the Zelle payment platform. Since Zelle's launch in 2017, customers reportedly lost over $870 million to scams, with banks accused of inadequate fraud prevention measures and insufficient reimbursement to victims. Source: The Wall Street Journal
How to Protect Yourself from Payment Platform Fraud:
• Verify recipient details before transferring money via Zelle or similar platforms. Use these platforms only for trusted contacts.
• Enable transaction alerts to monitor account activity.
• Familiarize yourself with your bank's fraud policies to understand your rights and reimbursement options.
Pig Butchering Scams: This scam involves fraudsters building fake relationships with victims to convince them to invest in fraudulent schemes, often involving cryptocurrencies. The term "pig butchering" refers to the process of fattening up the victim (the "pig") before defrauding them (the "butchering"). In 2024, such scams led to significant financial losses, including the collapse of Heartland Tri-State Bank in Kansas, where the CEO embezzled $47 million in an attempt to recover funds lost to a pig butchering scam.
How to Protect Yourself from Pig Butchering Scams:
• Be cautious of unsolicited investment opportunities, especially those involving cryptocurrencies.
• Verify the credentials of any person or entity asking you to invest. Trust but verify their claims with independent research.
• Report suspicious schemes to financial authorities immediately.
Synthetic Identity Fraud: This form of fraud, where criminals create fake identities using a combination of real and fabricated information, remained prevalent. Such identities were used to open bank accounts, secure loans, and commit other financial crimes, making detection and prevention challenging for banks.
How to Protect Yourself from Synthetic Identity Fraud:
• Regularly monitor your credit report for unfamiliar accounts or activities.
• Avoid sharing personal information unnecessarily and secure documents containing sensitive information.
• Use identity theft protection services to alert you to potential fraud.
AI-Powered Scams: The rise of artificial intelligence facilitated more sophisticated frauds, including deepfake technology used to impersonate individuals and deceive victims into transferring funds or divulging confidential information. These AI-driven scams posed new challenges for both consumers and financial institutions.
How to Protect Yourself from AI Scams:
• Be skeptical of unexpected requests for financial transfers, even if they appear to be from someone you know.
• Use multi-factor authentication (MFA) for your sensitive apps and accounts to prevent unauthorized access.
• Stay informed about new AI-driven scams and how to recognize them.
Contactless Payment Frauds: With the increasing adoption of contactless payments, fraudsters exploited vulnerabilities in these systems. Techniques such as intercepting near-field communication (NFC) signals allowed unauthorized transactions, leading to financial losses for consumers.
How to Protect Yourself from Contactless Payment Fraud:
• Use RFID-blocking wallets or sleeves to protect your cards from unauthorized scanning.
• Turn off NFC functionality on your phone or payment devices when not in use.
• Set transaction limits for your contactless cards for additional control.
These frauds underscore the evolving tactics employed by criminals in the personal banking sector throughout 2024, highlighting the need for enhanced security measures and consumer vigilance. For additional information about online scams and cybersecurity visit our website: https://www.myunionstate.bank/services/mobile-and-online-banking/online-security-tips
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