Online Banking Fraud: What to learn from Shayla King

The shunning of online banking services

Neo-Banks like Chime have been the top fintech sectors to lead the game of online banking with their low-to-no fees subscription accounts, and quick transaction approvals. Chime notably grew from encompassing 7 million customers to 13 million just through the end of 2020, doubling its stocks number to reach 25 million US dollars by august of the same year. Such an imagery is an ultimate appeal to both merchants and consumers when it comes to their liability on having online banking systems easing their financial matters on a day-to-day basis. This, however, proved on multiple reported cases through 2021 to be a facade, and the whole “malleable” subscription and easy-to-use features has been an entryway to various fraudulent schemes, many of which were cases of “First-Party Fraud” where bank-clientele would, an example of which, collect unemployment insurances from states they don’t live in, sometimes displacing cash from accounts, then withdrawing the same money amount while a transfer is still in process. This side of Fintech suppliers has shown its deep vulnerability to the exposure of identity theft, where clientele’s account database could be easily stolen online, and emptied out within a jefy, with no much action from the provider’s side to stop the process.

Background Story

Shayla King, a loyal client of Chime Online Bank, and a single mother of 4, living in Tampa, Florida, has reported her experience with fraud early of July, 2021, when she woke up on a Saturday to find multiple transaction texts from Chime stating certain amounts, a total of 62 transactions amounting to 744$, have been withdrawn from her account, asking her to confirm if they were withdrawn by her personally, to which to responded “no” and instantly reached out to Chime’s Customer service to report that those transactions were fraudulent. Her complaint, however, remained unresponsive, and the money withdrawal continued all the way up to Monday, almost emptying her account. King later on contacted an investigative consumer reporter, copying Chime’s Team in her email, after they denied her claims, and her case was resolved almost a month later from the date at which she issued her problem. “That’s my car payment, my electricity bill … I’m a paycheck-to-paycheck person, and I’m still trying to climb out of that hole.” That’s what King stated to press, after commenting that she’ll never in her life hand her financial matters to an online bank again. 

Fraudulent Key Metrics

King is nothing but one case from roughly a 0.30% of fraud rate reported through e-payment solutions. That has been reported by Aite-Novarica Group to be double credit card’s fraud rate of 0.15%, and triple debit card’s fraud rate of 0.10%. Taking into consideration that banking profitability is measured in hundredths of a percent, these numbers add up, placing it as a graver concern than it seems.

How to avoid falling prey to scams

Falling victim to cybercrime has been a global concern for both merchants and consumers. The “Frictionless” offerings of e-payment solutions, despite their appeal, have proved to lack the assurance factor that gives the “go” flag to clientele. We’ve listed you below the top methods you’ll need to maintain your financial safety as you subscribe to online payment gateways.

1- Keep your personal info updated

During 2021, as reported by US Resource Center, at least 282 million people have reported falling prey to cyber fraud, and the first passageway to scammers lies in the vulnerability of your personal info. Keeping your personal security data updated on a monthly basis makes you less vulnerable to cyber identity theft. Make sure that your passwords, security numbers..etc have a strong alphanumeric sequence, and that they’re free from any person-related factors (name, phone number, address name…etc).

2- Check for the “Copyright” signatures

Email impersonations were listed among the top 10 methods of cyber criminals as stated by NewYork Times. Fraudulent emails are basically a mirrored identity of entrusted platforms through which scammers play on your gullibility when you see a familiar name and visual through an email. It often embraces a CTA element calling consumers to Subscribe, Purchase,..etc, and, thinking it’s valid, you often action the button, allowing the scammers a sublime access to your data. To avoid that mistake, you should always check for the “Copyright” sign at the bottom of every email you receive. Verified platforms always have a Copyright sign along with their signature; that’s how they inform their consumers of their validity.

3- Look for the URLs validity

Phishing scams often lie under resourced URLs, through which consumer visits allow the other party to trespass their security gate, and easily take hold of their information, and crack through it. Cyber criminals often adopt a on-the-downlow method of promoting their activity that allows them to mitigate through the web without drawing attention that could have their links blacklisted. Look for the https// entry in the beginning of any URL you navigate to, as well as the “lock” sign at the end of the search bar. Mischievous URLs pass under a different coding system that lacks validity on the web, which is usually indicated in the absence of the https// entry in the link.

4- “Privacy Policies” are the key

It’s a common sociological habit that we often check our agreement to Privacy Policies without really reading them, which works as a security-weakening factor that places us as an easy prey to cyber criminals. Understanding a website’s Privacy Policy is the key to your personal info’s safety; through it you understand how the site protects the personal information it collects, therefore you can better assess the chances of whether or not your info would be vulnerable to scammers.

Keep your horizons wide open

Reliability on cybersecurity solutions no longer serves as a stable shield from cyber fraud. Staying updated on the latest of fintech news gives you a deeper insight on the constant evolvement of technology, and grows your awareness on methods through which they can be abused. That’s how you best maintain your personal safety without the unnecessary shunning/avoidance of e-payment solutions.

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