14 Online Fraud Prevention Tips

The sad truth is that many people do not take online fraud prevention tips seriously until after they have been a victim. 

No one wants their identity stolen or their bank account hacked. 

But it’s happening more and more every day.

According to the Insurance Information Institute (III), “In 2020 through April 10, the ITRC tracked 269 breaches that exposed 3.3 million records.”¹

Not only is online fraud dangerous to our personal wallets, but it is also dangerous for our economy. 

III reports, “McAfee and the Center for Strategic and International Studies (CSIS) estimated the likely annual cost to the global economy from cybercrime is $445 billion a year, with a range of between $375 billion and $575 billion.”² 

If we don’t take steps to protect ourselves online and follow the online fraud prevention tips listed below, then we put ourselves in a dangerous position.

Why We All Need to Take Heed of Online Fraud Prevention Tips 

online fraud prevention tips

The problem with online fraud is that it results in identity theft. 

Identity theft occurs when someone’s personal information, such as their name, address, social security number, or signature, is used to commit crime. 

The criminals also target personal financial information, such as credit card numbers or check routing numbers.

Sadly, many people don’t take online fraud seriously until it happens to them or someone they know. 

We’ve all heard stories of elderly victims who were tricked into giving a scammer thousands of dollars or their social security number online.

Many of us who are tech savvy tend to dismiss online fraud because we don’t think we’d fall for a Facebook scam request asking for money. 

The problem with this mindset is that hackers and online fraudsters keep getting smarter and are always finding new ways to dupe even those who seem the most knowledgeable. 

For example, a recent USA Today article titled “10 COVID-19 scams spreading right now that people are falling for” cited several examples of online fraud schemes that prey on the public’s COVID-19 fears or their generosity. 

The report claims, “The Federal Trade Commission says coronavirus-related scams have cost Americans $13.4 million so far this year. Google blocks more than 100 million phishing emails every day as criminals try to steal money and personal information. About 18 million of them are coronavirus-related.”³ 

Additionally, there are over 400,000 scam websites using domain names with the term “coronavirus” that are designed simply to steal your personal information and credit card numbers.⁴ 

As you can see, online fraud should not be taken lightly. It has the potential to destroy you financially and leave you feeling fearful for years to come. 

Keep reading for 14 online fraud prevention tips and avoid becoming a victim.

1. Know the Potential Dangers 

online fraud prevention tips

One of the most important online fraud prevention tips is to gain a clear understanding of the types of fraud and their potential dangers. 
You have probably heard some of the below terms before, but let’s take a minute to define the main types of online fraud.

  • Phishing – This is one of the main ways criminals commit identity theft. Phishing is when the online fraudster “fishes” for personal info by sending individuals emails asking for personal information, such as user names, passwords, or other private account information.
  • Spyware – Spyware allows the cyber criminal to spy on your computer activity, which means access to your personal, private information.
  • Viruses, Worms, and Trojans – These are malicious programs designed with the intention of secretly gaining your personal information by embedding into your computer’s hard drive.
    A virus infects your computer when you perform a certain action, such as double-clicking an email attachment.
    A worm is a stand-alone program that enters your computer system through a vulnerability in your network, and then replicates. When it copies itself, it spreads across networks and causes damage.
    A trojan is another stand-alone program that appears harmless and, thus, tricks the victim into installing it. For example, a trojan may appear as an email attachment, but once clicked, the program is installed, and then takes over your email program.
  • Data breaches – This type of online fraud occurs on a much larger scale. Since data breaches occur on what should be secure websites, copious amounts of personal data are in danger.

[Related: Data Breaches: 6 Things Consumers Can Do to Protect Privacy and Online Data] 

2. Monitor Your Accounts

online fraud prevention tips

It’s easy to set up online banking and bill pay, and then forget about it.

But you absolutely must monitor your accounts and do so frequently. 

This won’t necessarily prevent online fraud from occurring. However, if you notice discrepancies in a report or a charge to your debit card that you didn’t make, you can quickly freeze your credit or contact your bank to potentially prevent more damage from being done. 

3. Sign Up for Security Alerts

online fraud prevention tips

Most banks and credit card companies offer security alerts that will alert customers if there appears to be suspicious activity. 

All you need to do is sign up to receive a text or phone call when a suspicious purchase is made.

Additionally, if you believe your personal data has been compromised, you can place a fraud alert with credit agencies, such as ExperianTransUnion, or Equifax

When you sign up for fraud alerts with credit bureaus, a notice will appear on your credit reports that you may be a victim of identity theft and requires creditors to verify your identity before credit is given. 

NerdWallet explains, “Fraud alerts, credit freezes and locks — products offered by credit bureaus — all aim to prevent new accounts from being opened fraudulently.”⁵ 

Fraud alerts last for a full year and can be renewed year after year. 

4. Use Two-Factor Authentication

online fraud prevention tips

Two-factor authentication requires an additional level of ID proof rather than just a password to access software, apps, and even your phone. 

This makes passwords useless to hackers because it requires the user to use two different types of authentication to gain access, such as a password and a fingerprint for cell phone access or a password and a one-time verification code (sent via text message) for secure websites. 

This means your online account cannot be accessed without both the user’s password and cell phone. 

5. Update Software to the Latest Versions

online fraud prevention tips

It is important to update the software on your devices as soon as an update is available. 

Updates not only improve the device’s overall functionality, but they also make the devices more secure against online fraud. 

Fortunately, many of our devices offer automatic updates, but they may require you to opt in to install the update.

6. Always Use a Secure Internet Connection

online fraud prevention tips

Your home Wi-Fi router should always be set up securely. This means it needs to be password protected–unless you want anyone near your home to gain access to your network. 

Not only is an unsecure Wi-Fi network dangerous for security reasons, but it is also dangerous because cyber criminals may infect your network with viruses, worms, or other types of malware. 

It is also important to make sure your router is updated regularly to ensure it has the strongest protection against hackers. 

7. Use a VPN When Away from Home

online fraud prevention tips

Since we live in an internet-driven society, you likely need to access the internet when you are not at home. 

However, this means using unsecured public networks.

Instead of simply logging on to the public Wi-Fi at Starbucks, use a virtual private network. 

According to the National Cyber Security Alliance, “A VPN is a service that encrypts all of a device’s internet traffic and routes it through an intermediary server in a location of the user’s choosing. […] 

The encryption part of a VPN is similar to what you get when you visit an HTTPS site. 

Anyone who happens to intercept internet traffic between the smartphone or laptop and the VPN server won’t be able to decipher its contents, including Wi-Fi hackers.”⁶ 

8. Use Strong Passwords

online fraud prevention tips

One of the easiest online fraud prevention tips is to use strong passwords. 

Yes, it is annoying when websites ask for passwords that include a combination of letters and numbers (e.g., Il9vemyd1g). But this really is for your protection!

Check to see if you are making some of the most common password mistakes…

  • Using personal information, such as a pet’s name or anniversary.
  • Using your user ID as your password.
  • Using simple number sequences, such as 12345.
  • Recycling your password and using it for multiple websites.
  • Not changing your passwords frequently.
  • Sharing passwords. 

9. Clean Up Your Computer

online fraud prevention tips

Use an antivirus program to remove malware from your computer. 

Antivirus programs work to protect your computer from viruses and configure software with new updates automatically. 

Firewalls control what is shared between the computer and your network, as well as hiding the computers on the network to protect them from cyber criminals. 

If you do not already have an antivirus program on your computer, it is time to install one, as well as a firewall.

10. Don’t Download Software Casually

online fraud prevention tips

Unless you know the software is safe, do not download just any software on your computer. 

Make sure the entire family understands that software should not be downloaded casually. 

Downloadable free software that is not from an original, trustworthy website often has viruses or spyware. You should only download software from sites you trust and not from third-party websites. 

11. Don’t Share Personal Information Online

online fraud prevention tips

Do not share personal information online or with any person you do not know personally and trust. 

If you are asked for personal information in an email, a pop-up, or a website, and you cannot verify why it is needed, then it is likely a scam. 

In addition, you should never be asked for personal information from a business or company that should already have it. 

For example, a bank should never ask for your account number or debit card number in an email. 

12. Only Use Secure Websites

online fraud prevention tips

You should only use secure websites. 

Fortunately, it is easy to tell which websites are considered secure by their web address. 

Secure websites should use https. The “s” stands for secure. Additionally, the padlock icon appears to the left of the website address on secure websites.  

13. Shut Your Computer Down

online fraud prevention tips

USA gov advises, “Don’t keep your computer running all the time. Doing so will make it more prone to spyware and other attacks from hackers and identity thieves.”⁷ 

Make it a habit to shut down your computer each evening after work. 

14. Don’t Be Too Trusting. Be Suspicious. 

online fraud prevention tips

Last but not least, don’t be too trusting. You should be suspicious of unsolicited emails and texts or those that ask for personal information. 

If email or texts seem suspicious, avoid clicking any of the links or downloading any attachments. 

If you are unsure if the email is legitimate, do some research before you click anything. Contact the company directly rather than clicking the direct links. 

We regularly provide important financial updates on our Facebook Page. 

Join the conversation

Sources: 

  1. https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime
  2. https://www.iii.org/fact-statistic/facts-statistics-identity-theft-and-cybercrime
  3. https://www.usatoday.com/story/tech/columnist/2020/04/30/10-online-covid-19-scams-consumers-falling-right-now/3052342001/
  4. https://www.usatoday.com/story/tech/columnist/2020/04/30/10-online-covid-19-scams-consumers-falling-right-now/3052342001/
  5. https://www.nerdwallet.com/blog/finance/how-to-place-a-fraud-alert-on-your-credit-and-why-you-might-want-to/
  6. https://staysafeonline.org/blog/stay-secure-public-wifi-traveling/
  7. https://www.usa.gov/online-safety
0 0 vote
Article Rating

401(k) Maneuver™ is offered by Royal Fund Management, LLC, which is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.Royal Fund Management, LLC, is not affiliated with or endorsed by NASDAQ.

All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's investment portfolio. There are no assurances that a client’s portfolio will match or outperform any particular benchmark. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. Projections are based on assumptions that may not come to pass.

Images and photographs are included for the sole purpose of visually enhancing the website. None of them are photographs of current or former clients. They should not be construed as an endorsement or testimonial from any of the persons in the photograph.

0
Would love your thoughts, please comment.x
()
x

logo

Looking for tips that might maximize your retirement
savings and help you be a better steward of your money?

Subscribe to our 401(k) Blog

The go-to-source for your retirement investing and saving tips