As online banking services have become more popular, so too has online banking fraud. In fact, bank phishing scams have become one of the most common types of criminal activities on the internet. In addition to stealing login credentials for bank accounts, cybercriminals also steal credit and debit card information for their own financial gain. But how exactly do these cybercrimes work, and what implications do they have for the individual?
Online bank fraud essentially happens when a cybercriminal is able to steal an individual’s—or company’s—digital banking details and gain access to the associated bank accounts or credit cards. They then use this to their advantage, either siphoning money out of their account directly or otherwise perpetrating other types of financial fraud. Legally speaking, online banking fraud covers all manner of criminal activities carried out through a bank’s app or website. This includes illegally accessing someone else’s accounts to manage or transfer their money.
The highly digitized nature of modern banking gives attackers many different opportunities to execute these crimes. Despite banks taking more and more steps to secure their digital services and protect their clients’ accounts, the increasing sophistication of these attacks makes it exceedingly tricky to identify when these frauds are being carried out and difficult to prevent them.
Cybercriminals are using ever more sophisticated means to lure unsuspecting victims into inadvertently sharing their banking details and effect online banking fraud. Often, these attacks are multidimensional and incorporate a variety of techniques, so it becomes difficult to identify them. Because of this, it is essential that everyone who uses online banking services understand these attacks so that they can be on guard against them. There are two main types of online banking fraud: Account Takeovers (ATO) and Automatic Transfer Systems (ATS).
ATOs are digital banking scams where the cybercriminal takes over a bank account with stolen information. These attacks often involve social engineering techniques or malware, and the most advanced ones use both. Below are some of the most common methods cybercriminals enact online banking scams and ATOs:
Improvements in technology and cybersecurity mean that ATOs have become much tougher to execute. To work around this and continue perpetrating online banking fraud, cybercriminals developed new, automated techniques to execute the attacks efficiently and with a lower risk of detecting identity theft. These are called Automatic Transfer Systems (ATMs) and do not require the attacker to rely on bank login scams. Instead, these automated systems monitor a computer user’s activity. When the user logs into their bank account, this malware injects script into the legitimate site and initiates money transfers that the user does not notice until it is too late. This negates the need for the attacker to harvest user information and get through multifactor authentication protocols.
Although the two types of online bank scams are different, they both have the same goal—to steal funds and perpetrate financial fraud—they work quite differently.
Banking identity theft involves the cybercriminal stealing an individual’s identity to perpetrate financial fraud. By obtaining personal details such as names, birthdays, and social security numbers, attackers can initiate a wide array of actions. Bank account identity theft—and identity theft on a wider scale—can have severe and long-lasting impacts on the victims of these attacks. Some of these can include:
Unfortunately, bank account identity theft can have major repercussions for the individual or company targeted by these attacks. Of course, the financial impact is a serious concern, but there are other implications as well that are important to consider.
Online bank scams can have significant financial consequences, which can be devastating for individuals and organizations alike. Depending on what information is stolen, the attacker can clean out bank accounts, close and set up new accounts, ruin credit scores, commit tax fraud, steal retirement funds, and impact mortgages. In dealing with the fallout of these attacks, victims may find themselves incurring even more financial losses through legal fees, for example.
Banking identity theft can affect the mental health of those who fall victim to the scams. A whole range of emotions can come into play when an individual realizes that they have fallen victim to an online banking fraud, from shock and anger to fear and helplessness. They can come under considerable amounts of stress as they try to piece things back together, and often feel the need to blame someone for allowing this to happen.
In reality, it is never entirely possible to avoid banking phishing and other online scams. Of course, there are certain measures that can be taken to lessen the likelihood of their success or mitigate their impacts. Here are a few tips to keep in mind:
Online banking theft is becoming increasingly sophisticated and challenging to detect. But, these attacks can have significant financial, social, and emotional implications for the individuals and companies who are targeted. Understanding what online banking scams look like and implementing digital security features and common-sense safeguards can minimize the possibility of cybercriminals executing account takeovers or infecting devices with ATS malware.
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