Financial fraud refers to any type of dishonesty committed in the course of monetary dealings. It is a huge issue for the finance and financial technology industry in Malaysia.

While fraudsters can contact their potential victims in a variety of ways including face-to-face engagement, mail, phone calls, SMS, and/or emails, internet fraud is the fastest-growing method used by cybercriminals. This is owing to:

• the difficulty of verifying individuals’ and companies’ identities and legitimacy;
• the ease with which fraudsters can divert visitors to bogus sites and steal personal financial information; as well as
• the international dimensions of the internet, and the ease with which fraudsters can conceal their true location.

Thankfully, there are ways you can protect yourself from such criminal activity.

1. Verify the person contacting you

A scammer takes your identity and utilises your personal information, or bank account or credit card credentials, to perform illicit online or in-person transactions. They typically get a victim’s personal information by impersonating someone from an authority – such as a bank or government office – and convincing them that personal information is required for official purposes.

Other illicit methods of obtaining the same information include cash skimming, card cloning, phishing, vishing, and spoofing.

Be wary of unexpected phone calls from people claiming to be in positions of authority and requesting such confidential information. Identify the individual by calling the specified organisation.

2. Secure your accounts

Here are steps you can take to monitor and secure your banking or credit card transactions:

• Set up text and/or email alerts for your bank accounts

You can configure alerts to tell you when an account receives a deposit, a transaction is conducted, your debit card is used, or your balance hits a specified threshold. By doing so, you can detect any unauthorised activity on your account before it does serious damage.

• Set up alerts for a weekly balance update

While most people make frequent withdrawals from their accounts, some users’ savings accounts go unchecked for long periods.

By setting up alerts, you will receive a balance update informing you of any changes from the previous week, even if your account goes untouched for more than seven days.

• Set up alerts for credit card transactions

Credit card notifications, like banking account alerts, should be established for charges that go beyond a predetermined amount. You can also receive alerts for cash withdrawals made with your card, or if your overall balance exceeds a specific amount.

Setting up a weekly credit card balance alert can help you determine whether it has been used without your knowledge.

• Contact your bank if you plan to travel

If you wish to travel for business or vacation, alert your bank to allow foreign transactions.

• Use secure online banking

Contacting your bank by email is a less secure option than going through its secure channels. As the recipient has no means of knowing who sent the email, the institution will be unable to respond and is not authorised to convey personal or financial information over email.

3. Take precautions when online

The internet is rife with malicious software, spam, and spyware, so install security software on your computer and ensure it is updated. Other security methods include:

• Using difficult passwords

Most consumers use common passwords for various activities, including sensitive transactions such as online banking and credit cards. While this makes it easy to remember the password, it poses a potential threat to security.

Make sure you use complex alphanumeric passwords for all transactions.

It’s also important to change your passwords frequently and have a variety for different accounts. A strong password has at least eight characters that are a mix of letters, numbers, and special symbols.

Update your passwords regularly and keep them safe by noting them down securely or using a password-management tool.

• Avoiding public WiFi

Always use your personal computers or mobile phones to conduct any type of transaction. Also, always connect to the internet using a secure WiFi connection that is password protected.

Doing financial transactions via a public WiFi connection is extremely risky and should be avoided.

• Being careful with emails

Any promotional emails requesting your bank information should be ignored and reported as spam. Keep in mind that your bank will never request for your financial credentials.

If you often receive promotional emails from retailers, go directly to the seller’s site rather than entering details in the coupon link, which is frequently given by third parties.

• Examining SSL certificates

Many small sellers do not include security procedures, which may jeopardise security. It is best to conduct online transactions via websites that begin with “https” rather than “http”, which do not use adequate encryption.

• Logging off

Always log out of your bank’s or merchant’s websites after completing a transaction.

4. Always ask questions

If you run a business, here are some questions to ensure your company remains vigilant:

• Are there unusually favourable or unfavourable financial terms with banks?
• Do any suppliers appear to be getting disproportionately big shares of the business, or get being paid considerably more than market rates?
• Do some customers appear to be getting much better prices and terms than others?

Investigating the answers can help you stay one step ahead and protect your organisation from potential fraudulent activity.

This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.