What Is Bank Fraud?
Bank fraud affects millions of people every year, leading to lost money, added stress and time spent resolving the issue. While scams continue to evolve, knowing the warning signs may help you protect yourself.
What Is Bank Fraud?
Bank fraud is when someone illegally tries to access your bank accounts, money or personal information. It can happen:
- On a phone call or by text message
- Through the mail
- By email
- Online
- In person
Fraudsters and scammers can take advantage of weak spots, like gaps in security or moments of stress, confusion or distraction. They may use tactics like fear, pressure or manipulation to trick you.
Your bank uses several security measures to protect your information and your money, but staying alert matters, too.
What Are the Types of Bank Fraud?
There are many types of financial fraud and scams to be aware of. These are some of the most common:
- Elder financial exploitation: This happens when someone takes advantage of an older adult to access their money or financial accounts. It may involve deception, pressure tactics or abuse of a trusted relationship.
- Imposter scams: This is when someone pretends to be a person or organization you trust to get you to send money or share personal information.
- Phishing: Phishing is when someone uses a fraudulent email or website to try to get you to share personal information, account credentials or financial details.
- Mail fraud: This happens when someone uses mail to deceive you for financial gain. It may involve fake checks, invoices, offers or requests for personal information.
- Wire or money transfer fraud: Wire fraud happens when money is transferred from your account without your authorization or through fraudulent activity.
What’s the relationship between bank fraud and identity theft?
While they’re closely connected, they aren’t the same thing:
- Identity theft is when someone steals your personal information, like your Social Security number, bank account information or credit card number, without your permission.
- Bank fraud occurs when someone uses deception or stolen information to access funds, make unauthorized transactions or gain control of financial accounts.
In many cases, identity theft is one way criminals commit bank fraud.
How Does Bank Fraud Work?
Bank fraud can happen in different ways, but the goal is usually the same: to gain access to money, accounts or personal information. Criminals may use scams, stolen identities, account takeovers, counterfeit checks, mail theft or other deceptive tactics.
In some cases, a fraudster contacts you directly by phone, text, email, mail or social media and tries to gain your trust. They may pretend to be someone you know or a company you recognize, creating a sense of urgency by claiming your account is at risk, you owe money or immediate action is required.
In other cases, fraud can happen without direct contact. Criminals may use stolen personal information, compromised account credentials or other methods to access accounts or make unauthorized transactions.
Who’s most at risk of financial fraud?
Adults aged 60 and older are often at a higher risk of financial fraud. Scammers may target this group because they often have savings and a steady income. They may also target older adults who are experiencing life changes, like the loss of a loved one or increased isolation.
Banks may use fraud detection tools to help identify unusual account activity and encourage customers to report suspicious transactions as soon as possible.
How Do I Protect My Account from Fraud?
Bank fraud and scams can happen anywhere and at any time. These steps may help reduce your risk:
- Monitor your accounts regularly: Review your transactions and account activity often. Look for purchases, withdrawals or other activity you don't recognize. Even a small, unauthorized transaction can be a sign of fraud.
- Set up account alerts: Account alerts can notify you of certain account activity, helping you spot potential issues sooner.
- Use strong, unique passwords: Create passwords that are difficult to guess and avoid using the same password across multiple accounts.
- Enable multifactor authentication (MFA): MFA adds an extra layer of security by requiring a second form of verification when signing on.
- Be cautious with unexpected communications: Be wary of calls, texts, emails or social media messages that ask for personal information, account credentials or immediate action.
- Avoid clicking suspicious links or attachments: Fraudsters may use links or attachments to collect personal information or install malicious software.
- Contact your bank if you notice suspicious activity: If something doesn't look right, contact your bank through a trusted phone number or website.
What’s a fraud alert?
A fraud alert is a notice you can place on your credit report. It tells lenders to take extra steps to verify your identity before opening a new account in your name.
This helps protect you from identity theft by making it harder for someone else to use your information to get credit.
What’s a credit freeze?
A credit freeze is a tool that blocks access to your credit report. It makes sure no one can open new credit accounts in your name.
A freeze may protect you from identity theft. You can lift the freeze when you need to apply for credit, like a loan or credit card, and then turn it back on afterward.
What’s fraud insurance?
Fraud insurance, also called identity theft insurance, helps protect you if someone uses your personal information to commit fraud. It may cover certain costs related to identity theft.
Some banks partner with insurance providers to offer plans that include monitoring and support services. Common plan features may include:
- Identity and credit monitoring: Alerts you to unusual activity
- Identity theft reimbursement: Helps cover certain costs related to fraud
- Transaction monitoring: Watches for suspicious account activity
- Dark web and social media monitoring: Scans for your personal information online
- Lost wallet protection: Helps if your cards or ID are lost or stolen
- Data breach alerts: Notifies you if your information may be exposed
Does a Debit Card Have Fraud Protection?
Yes, debit cards have fraud protection under federal law. If you have a lost or stolen card, the law limits how much you may have to pay for unauthorized charges (purchases you didn’t make).
How much protection you have depends on how quickly you report the issue. For example, if you make a report before any unauthorized charges happen, you may not be responsible for them.
If you wait to report it, you might have to pay for some or all of those charges. That’s why it’s important to contact your bank as soon as you notice a problem.
While federal law provides basic protection, your bank may offer extra fraud coverage or tools based on your account.
What Should I Do If My Bank Account or Card Is Compromised?
If you think your account, card or personal information has been compromised, act quickly:
- Contact your bank immediately: Report the issue through a trusted channel, like calling your bank's fraud hotline or customer service number.
- Secure your account and cards: Follow your bank's instructions to restrict access to affected accounts, replace compromised cards and update security settings if needed.
- Place a fraud alert on your credit report: If you believe your identity has been stolen, a fraud alert may make it harder for someone to open new accounts in your name.
- Report the fraud to the appropriate authorities: Depending on the situation, you may report the incident to local law enforcement, the Federal Trade Commission (FTC), local adult protective services (for older adults) or the Consumer Financial Protection Bureau (CFPB).
Key clients should call the KeyBank Fraud Client Service Center immediately at 1-800-433-0124. Dial 711 for TTY/TRS.
How Does KeyBank Protect My Account From Fraud?
KeyBank offers tools and resources designed to help customers monitor account activity and stay informed about potential fraud. These include:
- Account alerts: Get notified by text or email when certain account activity occurs so you can monitor your accounts more closely.
- Quick action tools: Lock your card or report it lost or stolen if you suspect unauthorized use.
- Fraud education resources: Visit key.com/fraud to learn about common scams, fraud prevention tips and cybersecurity resources.
Access to reliable fraud information can benefit everyone. Consider sharing these resources with loved ones so they can stay informed about evolving fraud tactics.