If you’ve ever worried about the security of your bank account, you’re not alone. A new study shows that scams and fraud are on the rise, affecting millions of bank customers. But the good news is that banks are taking action to protect your money—and there are steps you can take to strengthen your own security.
According to J.D. Power, nearly 30% of bank customers experienced fraud on their accounts in the past year. These incidents range from unauthorized charges and stolen funds to people unknowingly sending money to scammers via peer-to-peer (P2P) payment apps.
The rise in fraud is tied to the increasing use of P2P apps and the growing trend of impersonal, digital transactions. As Jennifer White, senior director of banking and payment intelligence at J.D. Power, explains, “You would never hand $100 to a stranger, but in many ways, that’s what P2P payments can feel like.”
Compounding the problem are massive data breaches—like the National Public Data breach—that expose billions of Social Security numbers and other sensitive data. Fraudsters use this information to impersonate banks, contacting customers with convincing tactics to steal more personal details.
“It’s easy to fall for these scams because they have so much of your personal information,” says Paul Benda, executive vice president for risk, fraud, and cybersecurity at the American Bankers Association.
Fraud Is Happening More Often—and Multiple Times
The J.D. Power study, released on November 7, reveals that 29% of bank customers have faced fraud in the last year. More worryingly, 45% of these customers experienced multiple fraud incidents. “It’s not just happening once,” says White.
Younger customers—especially those under 40—are more likely to fall victim to fraud. Though they’re digital natives, they are also frequent users of P2P apps, making them prime targets for scammers.
On a positive note, many customers are satisfied with how their banks handle fraud cases. In fact, 92% of customers said they would continue banking with their institution if the fraud was resolved successfully. Only 17% said the experience left them with a negative impression.
Banks Are Fighting Fraud—But Are You Taking Enough Precautions?
Banks are investing billions of dollars every year to protect their customers from fraud. Yet the J.D. Power study found that many consumers aren’t doing enough to protect themselves. While 46% of customers said their bank had prompted them to take action against fraud in the past 90 days, a quarter of customers reported doing nothing to secure their accounts during that time.
Checking recent transactions for suspicious activity is the most common protective measure, but experts say this is a reactive approach, not a proactive one. Waiting until fraud has already occurred doesn’t offer full protection.
Simple Ways to Secure Your Bank Account
While it may feel like keeping up with fraudsters is an uphill battle, there are several steps you can take to better protect your account from being targeted:
1. Check Your Bank’s Security Center
Most banks offer a “security center” on their website or app, where you can manage your security settings and review protections in place for your account. It’s an easy way to ensure you’re taking advantage of the tools your bank provides.
2. Use Strong, Unique Passwords
Avoid using easily guessable information (like your birthday or pet’s name) for passwords. Instead, create strong, unique passwords for each account, and consider using a password manager to store them securely. If you’re notified that your password was compromised in a data breach, change it immediately.
3. Set Up Alerts
Set up alerts with your bank to notify you about important account activity, such as large withdrawals, changes to your personal information, or failed login attempts. Alerts help you detect fraud early, so you can act quickly.
4. Enable Two-Factor Authentication (2FA)
Two-factor authentication (2FA) adds an extra layer of security by requiring you to verify your identity with something you know (like a password) and something you have (like a code sent to your phone). Many banks also offer biometric verification, like fingerprint or facial recognition, for additional protection.
5. Keep Your Banking App Updated
Ensure that your banking app is always up to date. New versions often include security patches to protect against the latest threats. Most apps will prompt you when an update is available, so don’t ignore those notifications.
6. Go Paperless
Switching to paperless statements is not only more convenient but also safer. Without physical mail containing your sensitive account details, there’s less chance for fraudsters to intercept your information.
7. Protect Your Smartphone
Your smartphone is a gateway to your financial accounts, so treat it with care. Never leave it unlocked or unattended, and avoid sharing it with others, especially when making payments. Always complete transactions yourself, rather than handing your phone to someone else.
8. Be Wary of Unsolicited Messages
If you receive unexpected emails, phone calls, or texts claiming to be from your bank, be suspicious. Watch out for red flags like unsolicited links, urgent language, attachments, requests for personal details, or pressure to send money via a payment app. If the message wasn’t expected, don’t click any links or share personal information.
Stay Ahead of Scammers
Fraud losses worldwide are expected to top $1 trillion this year, a stark reminder of how serious the threat is. But by taking the right precautions, you can protect your bank account from falling into the wrong hands.
While banks are doing their part to secure your account, it’s up to you to stay vigilant. By following these tips and making your account security a priority, you can help reduce the chances of becoming a victim of fraud.
