Mobile Banking Scams and Ways to Avoid Them

Mobile banking has gained tremendous traction over the years for its convenience. Users can make banking transactions using only their mobile devices with an internet connection. No need to line up at a brick-and-mortar bank to make deposits or transfer money to another bank account. It has clearly revolutionized the banking industry, with millions of people globally taking advantage of its ease of use and accessibility.

However, fraudsters always find ways to commit their crimes wherever there is money involved. If traditional bank consumers fear being robbed in broad daylight while they're withdrawing money at an ATM machine, mobile banking users run the risk of being subjected to a digitally performed theft. Naturally, this rampancy of scams makes people anxious about losing their hard-earned money through these evil schemes.

Fortunately, there are security measures imposed by mobile banking providers and best practices that users must bear in mind to keep their mobile bank account downright safe from scammers at all times. In this article, Lumina Homes aim to discuss the most common mobile banking scams, as well as the smart ways to best avoid them.

4 Common Mobile Issues that Enable Fraud

Before zeroing in on the security best practices to not be victimized by scams, here are the most common mobile banking issues to watch out for:

1. Network provider data breach

This is what prompted Philippine lawmakers to legislate the Sim Card Registration Act. Senators gauged that the onslaught of spam messages in practically every cellphone and sim card user in the Philippines has to do with, at least in part, data breaches on network providers.

In this mobile fraud type, hackers infiltrate the systems of network providers, which will allow them to access the personal information of these providers' subscribers. This is one potent scam method that network providers are being held accountable for. With the new law on sim cards in full effect, it can help deter scams and detect the identity of scammers.

2. App Security (or lack thereof)

Mobile banking apps are typically more secure than manually accessing one's account via a browser, but cyber threats are not absent even with mobile applications. This still makes it vulnerable to different forms of cyber attacks and money-laundering schemes.

While security measures are in place, the more prolific hackers could still gain access and perform their mobile modus operandi. Lost and stolen credentials and unauthorized transactions can still be attributed to insufficient security layers.

3. Malware Issues

Scammers can go undetected by making use of virus-generating software to disrupt computer and mobile systems and get hold of personal details to impersonate a mobile bank user. Malware risks continue to be a growing concern because hackers find new and despicably smarter approaches to commit their fraudulent activities.

4. Phone Theft

If your phone is stolen or simply lost, the person who is now in illegal possession of it may infiltrate your online banking account and get hold of your financial information. The scammer may attempt to change your password to override your account. This makes it easy for the scammer to make illegal transactions on your behalf.

Security Measures for Banks to Prevent Mobile Banking Frauds

Mobile banking providers bear the responsibility of securing every customer's account to keep the latter's trust in patronizing their banking services. Below are five of the most potent security measures to prevent scammers from performing their evil crimes.

1. Multi-factor Authentication

One of the most effective measures used versus mobile scams is a multi-factor authentication mechanism. This is done during account registration where a user will receive one-time authentication codes to mitigate the risk of account takeover and user impersonation. What is more, every time a person wants to access his or her mobile bank account, they will be asked to put in a code that they will receive via text.

2. Facial and Fingerprint Verification

Another hacker-defying security feature is the use of facial and fingerprint recognition to access an account. Fingerprint verification is especially helpful since every person's fingerprint is unique. Therefore, no hackers can imitate your fingerprint unless they will cut your finger out, which only happens in the movies. The same applies to facial recognition as a potent way to secure your financial information from an account takeover attempt.

3. Enabling Email and SMS alerts

This security feature allows an account owner to be notified right off the bat about digital transactions that he or she may not have made. This way, it could be reported to the bank immediately and be known what caused the identity theft, as well as implement the necessary measures to get the hacker's identity and, if possible, reverse the transaction and retrieve the stolen money.

4. Online Activity Behavior Analysis

A normal online activity behavior could be distinguished from a suspicious one. For example, access from a foreign country is not a normal online activity behavior. By detecting this, banks can notify a customer about the potentially illegal activity. If it's not, banks should still notify the customer. Only this time, to confirm with the user whether the unusual activity is his or her own doing, and that there is nothing to worry about.

5. Routine Monitoring and Malware Cleaning

Banks can be held accountable for the many security risks that their customers experience. Hence, it is also their duty to protect their clients from security risks by making use of the latest software to enable regular monitoring and cleaning of any perilous malware. This way, a computer system will not be easily compromised.

6. HTTPS Usage for Protected Access

Even employees from banks can be hoodwinked into clicking virus-carrying websites that will make it possible for hackers to gain access to a computer system. In consequence, they can make screengrabs of a stream of personal data, see emails, and steal information in order to take huge sums of money electronically. With all this said, clickable hyperlinks that don't have the "HTTPS" protocol must be avoided with zero hesitation.

Dos and Don'ts to Avoid Mobile Fraud

On top of utilizing the security measures that your mobile banking provider has in place, add an extra layer of security to your mobile bank accounts by being smart and responsible when met with dubious activities that either you have done or someone on your behalf. Below are some dos and don'ts that will help you avoid mobile banking fraudsters.

• Do not share your personal and bank account information with anyone or anything who is questionably asking for it.

• Never share a One-Time Pin (OTP) that you're not sure is your own doing or request. This is a trap to steal your account and take your money.

• Always watch out for red flags: typographical and grammatical errors in an email, spam text message, or any other unsolicited communication online are such signs.

• Never click on links that promise extra income, lucrative side hustle, and any other tempting promises.

• Click only on links with an "https://" indicator. Opening links with this are considered safe and scam-proof. Though it's best to not click on anything at all.

• Monitor your account and regularly check your transaction history. This will keep you noted of all recent transactions you've made (or may have not).

• Refrain from disclosing any of your personal details on social media. As much as possible, keep your account private or on friends-only settings.

• Contact your mobile banking provider and report any suspicious activities that may be happening in your account.

By utilizing the security measures imposed by financial institutions and following the best practices versus scams, mobile banking will give you an online banking experience like no other.

Even in the process of purchasing your affordable house and lot, banking as a funding institution is extremely important. Banks offer lower interest rates yet higher loanable amounts if you're eyeing a relatively costlier house and lot in the Philippines.

In addition to Pag-IBIG financing, banks are often the first resort of serious homebuyers. After getting your home loan application approved by the banking institution of your choice, you can then get in touch with a Lumina Homes agent to assist you in your journey of buying quality yet affordable house and lot for sale. Become a Lumina homeowner this year and make your home reservation through our website!