As the world becomes increasingly digital, it can be daunting thinking of your finances and just how safe they are online. Online banking is now considered the norm and more and more financial processes are moving towards online-only – from opening a new bank account to applying for a mortgage. For some, an all-digital world isn’t a problem; many people have grown up using technology so it’s second nature and intuitive. But for others, technology can feel like an inevitable doomsday and the thought of trusting a computer or phone with your delicate financial information might feel ridiculous.

While there are already several fraud-prevention measures in place when it comes to the financial industry – including a dedicated anti-fraud organisation called Cifas – there are some things you can do on a daily and monthly basis to better protect yourself against fraud.

Types of Fraud

The two types of fraud we’ll look at in this guide include financial fraud and identity fraud. Financial fraud is generally when someone takes money from you by deceit, misleading you or other illegal methods. An example might be someone using your debit card to make an unauthorised purchase. Identity fraud is where someone steals your identity to commit a crime. It might be using your personal details to create a fake drivers license or passport, for example, though there are several ways in which criminals can use another person’s identity unlawfully.

How to protect yourself against potential fraud

Unfortunately, no one is entirely safe against potential acts of fraud, but if you have a fairly rigid grasp on your security and you regularly update and check your accounts, you’ll be less likely to fall victim and you’ll be harder to hack.

Never share your login information

It’s something that is preached all the time, but it really is the simplest way to prevent fraud. Keeping your login information to yourself means others can’t access your bank account, email account and credit cards etc. Although it may seem harmless to share your debit card PIN with family or friends, you never know who might take advantage of you and unfortunately a lot of financial fraud is committed by the people we know. If you’ve already shared some of this information, you may want to consider updating your passwords or changing your PIN number.

Update your security information as often as possible

Updating your passwords at least every six months is a good way to reduce the risk of fraud on your finances and your identity. If your login details with one company are leaked as part of a data breach, that information could fall into the wrong hands and be used to harm you financially. By changing your passwords, this is less likely to be a problem for you. It’s also beneficial to have different passwords for each of your logins, especially if you use the same email address or username across multiple accounts. If someone does try to hack your information, they’ll probably guess you have the same password and suddenly they’ll have access to multiple accounts, instead of just one. You should also set up security alerts, so you get notified if someone has tried to reset or change your password and create a recovery email address in case you get logged out of your emails. Most online accounts are linked by email address and if your emails become inaccessible, you may miss important updates and security alerts.

Check your online banking every day

Checking your online banking regularly will increase your awareness of your expenditure and you’ll also be more likely to spot any unusual transactions more quickly. Sometimes, logging into online banking can be a faff, so consider setting up mobile banking instead. Usually, you can log in using fingerprint or face ID, otherwise you can create a login passcode of 4 to 6 digits. It’s much quicker than checking your online banking, and as it’s on your phone, you can check it multiple times a day with little effort. You may also find you can improve your financial wellbeing by checking your spending regularly.

If a transaction looks unfamiliar, you can usually do a quick Google search to see if the reference relates to a business to which you’ve recently made a payment. Some local cafes and small businesses might not have the reference set up as the name of their shop and it can be confusing trying to workout what the payment relates to. If you’ve checked online and you still don’t recognise a transaction, most mobile banking apps have the option to freeze your card so no further purchases can be made. You can then contact your bank to find out more information about the transaction and cancel the card if required. If the transaction wasn’t you, you can then report the case as fraud and the bank can cancel the card with minimal damage to your finances. They should also reimburse you the lost funds. If you only check your account monthly or even weekly, a fraudster could have plenty of time to make several transactions, potentially draining your bank account.

Most banks have an automatic fraud prevention system set up which flags any unusual purchases or card payments made from an unusual location, but unfortunately not everything is immediately detectable, so the sooner you can spot a potentially fraudulent transaction, the sooner the issue can be stopped and remedied.

Check your credit file regularly

This may not immediately seem helpful, but one of the reasons people commit identity fraud is to apply for loans and credit cards in someone else’s name, so they are not responsible for the repayments. You then receive a Default or letters through the post advising you of missed payments and overdue accounts, demanding money for a loan you never applied for. It can be scary and overwhelming – and while many creditors have fraud prevention measures in place, if someone has used your identity to create a new bank account for example, detecting the fraud can be near impossible.

By checking your credit file regularly (we’d recommend at least once a month as credit reference agencies update your information monthly), you should be able to spot any unusual activity fairly quickly. You can then contact the lender to report the case, and also contact Action Fraud to create a case that they may be able to investigate further. Most credit reference agencies have a free version to check your credit file on, but there are some you need to pay for. It’s probably good to have the free service set up, and then if something looks odd – maybe your credit score is going down, but you’ve not missed any payments – you can contact them to find out more.

Keeping your finances protected against potential fraud involves a lot of vigilance and a constant effort to keep your information safe and regularly updated. It doesn’t mean there’s no chance of you being a victim of fraud, but it can massively mitigate the risk of someone taking advantage of you. Never give anyone your account logins – and if anyone does ask for this information, it’s likely to be a scam.

We can’t avoid the shift towards a digital world, but you can increase your awareness and understanding of how to stay safe, in order to reduce the risk of financial and identity fraud against you.