Updated: Apr 01, 2024

5 Online Banking Scams Every Consumer Should Know

With technology getting more and more advanced, banks are outdoing each other in adding banking services that can be accessed across various platforms and applications.
Today's Rates
Super boost your savings with highest rates.
Savings Accounts up to:
5.35% APY

With technology getting more and more advanced, banks are outdoing each other in adding banking services that can be accessed across various platforms and applications.

When customers think banking convenience, online banking is what immediately comes to mind.

Unfortunately, with the tough economic times, cyber crooks and fraudsters are also growing more tech-savvy nowadays and this has led to the rise of scams victimizing hapless online banking customers.

As with all types of frauds, the best way bank costumers can counter this is to have more information and be fully aware of the possible dangers that lurk in cyber space.

Here are 5 of the most common online banking scams that consumers should be aware of:


Although many online banking consumers are now aware of what phishing is, a lot of them still fall victim to it.  

In electronic frauds, phishing is perhaps the oldest form of identity theft where scammers send out an authentic-looking email that purportedly comes from the victim's bank, requesting him or her to update his or her account information for various official-sounding reasons.

The client will then be asked to click on a link that is supposed to direct him to the bank's website but instead takes him to a site that looks exactly like the bank site but is actually a fraudulent one, where the scammers can record whatever pertinent data the client enters.

To avoid being conned into a phishing scam, never click on links for bank account updates.

If any account updating needs to be done, do so by typing in the bank website (usually www.name-of-bank.com) yourself.

If you receive any "bank emails" be sure to call your bank to confirm if this is a legitimate communication.

Stolen Passwords

Stealing, cracking, or guessing passwords is another method widely-used by hackers to gain access to bank accounts or financial transactions.

Studies have shown that the more experienced and technologically advanced of these hackers can make about one billion guessing attempts in one second.

The best prevention bank customers have against these attacks is to use more secure passwords.

The longer passwords are usually harder to crack, as are passwords that are composed of both letters and numbers.

A 5-character password can be cracked in 10 seconds, while an 8-character can only be correctly guessed in 115 days. In addition, if you can't commit your passwords to memory, make sure that you record them in a secure document and not in plain view of anybody who passes by your office desk.

Worm or Virus Attacks

Another form of online scamming that is getting to be more popular these days is the use of worms or viruses.

Consider this scenario: A "friend" of yours in MySpace or Facebook invites you to watch a must-see video.

Thinking that you know the sender anyway, you click the link to watch.

Then the computer freezes and you are informed that your video software needs upgrading.

Once you click to "upgrade", what you get is not an updated version of your video player, but a Malware or Trojan horse.

Once the virus enters your computer, most of the data in your computer will be copied and sent to the hackers, who then will use whatever information they can glean to access banks accounts or financial documents.

There are even more advanced types of Trojans which can make fraudulent transfers while an online banking client is logged on to the bank's website.

To protect your computer from Trojans and Malware which are now getting all too common, invest in an up-to-date and effective anti-virus software.

Also, you would want to be careful on what sites you are logging to on the web as many of these sites can unwittingly transmit these viruses.

Malicious Software on Computers in Public Places

Cyber crooks have also learned the art of preying on individuals using public computers.

These hackers even go as far as working in hotels, airports, internet cafes, and other business centers where people go to access the web.

They start their fraudulent schemes by installing software on the computers which records the keystrokes entered on the computer.

As soon as someone accesses an online banking site through these PCs, the account data such as username or password, will be stored by the malicious software earlier installed and sent to the scammer's computers.

It is advisable then to refrain from accessing your online bank accounts when using computers in public places.

Targeting Wireless Networks

While using a wireless network can prove to be very a convenient mobile access to the internet, it is also very vulnerable to fraudsters' hacking including interference, hijacking, eavesdropping, and other similar wireless attacks.

Take extra precaution when using wireless networks especially outside of your home or office, although even these locations can still be penetrated by financially-motivated scammers by financially-motivated scammers.

Three Ways to Protect Your Checking Account

Your checking account could be vulnerable to fraud and excess charges, but you can take simple steps to safeguard your account and make sure your money stays secure.

From keeping your account information out of others’ hands to staying current on your balance and statements to keeping an open line of communication with your bank, these tips are easy but necessary.

1. Stay up to date on your monthly statements

Keeping up with your account activity and carefully reviewing your statements each month serves two important purposes.

First, if you know how much money is in your account at all times, you won’t spend or withdraw past your limit.

With overdraft protection fees that average nearly $30, you are more likely to cost yourself money by overdrawing than you are by falling victim to fraud — and it’s completely preventable.

Secondly, you should review your statement to ensure all the charges, debits, payments and withdrawals taken your account are transactions you authorized.

The best way to do that is by carefully combing through your statement each month.

If you discover a transaction that looks out of place, get in touch with your bank as soon as possible.

2. Keep your account information as private as possible

You would never hand a stranger your account number and routing information, so be sure to only give that information to businesses you trust.

If you are paying via check, make sure you only conduct a transaction with a familiar company or that, in the case of an unfamiliar business, you were the one who initiated the transaction.

Do not reply to any solicitation with your account number and routing information: It’s an easy way to fall victim to check fraud.

3. Stay in touch with your bank

At the first sign of check fraud or issues with your checking account, contacting your bank should be your first step.

The longer you wait before calling or visiting your bank, the longer it will take the institution to resolve whatever problem exists.

Be sure to hold onto copies of any documents involved in the suspicious activity.

If your account has been defrauded, you may also need to contact the authorities.

Choose What's Right for Your Money. Get Free Financial Advice. Find the Best Banks