Internet Banking Frauds – How To Prevent It?

Is internet banking 100% secure? Unfortunately it is not. In spite of all the security measures, frauds do take place, even though rarely. However, you don’t need to worry, since banks across the world have learned to be alert against such attempts.

Types of Internet Banking Frauds

Phishing

Phishing operates by sending forged e-mail, impersonating an online bank that request personal banking or financial information. The e-mail thus sent will direct the user to a forged web site which is designed to look exactly like the original banking site. This site will ask the user to update their personal information. The information thus stolen is then used in other frauds as well as executing transactions.

The best way to avoid this type of internet banking fraud is to never provide personal banking information over the internet when it is requested through email. If you believe that you may have provided information over the internet to an illegitimate source, immediately contact your financial institution to have your password changed. It should be noted that because of same reason banks never request your personal information through email. Thus, if you receive a message claiming from a bank, it would probably be from a fraudster.

Identity Theft

Identity theft is another prominent type of internet banking fraud that can be extremely injurious to consumers. Identity theft in interner banking occurs when a criminal use specialized software(trojans & keyloggers) to record keystrokes on a victim’’s computer in order to decipher personal financial information about the person. These internet banking fraud criminals then use the stolen data to access the victim’s bank account to commit fraud.

You can be safe from this type of fraud by periodically checking your computer for spywares, trojans and viruses. It is also suggested to use a personal firewall to prevent any un-wanted program from accessing internet.

Un-Protected Online Transactions

Internet banking fraud can also occur when consumers make online purchases over an unprotected website. If your privacy remains un-protected, criminals can use the stolen data to commit banking frauds.

This type of fraud is becoming a rarity by the introduction on new generation browsers like FireFox 3 , IE 7 & Google Chrome. These browsers will warn you if you are visiting an un-protected website. In older browsers, you can view the digital SSL certificates of these websites. If these digital certificates are not from a reliable authority, you can be sure that the website you are visiting is an un-secured website.

Conclusion

Nowadays we have several countermeasures which help to avoid attacks. The use of class-3 card readers is a measure to avoid manipulation of transactions by the software in signature based online banking variants. Digital certificates are used against phishing and pharming. Users should use virus scanners and should be careful with downloaded software or e-mail attachments to protect the system from Trojan horses.