The new way scammers steal your money

If you use mobile banking, make sure you don't become a victim of fraud...

Mobile phones have moved on a long way from the big brick I used to have when I was at university. I remember the days when the only game you could play on your mobile was Snake. But now phones are far more sophisticated and fancy.

In fact, thanks to the increasing popularity of smart phones, which are allowing us to use our mobiles to do pretty much anything, Berg Insight is forecasting that by 2015, 894 million people worldwide will use mobile banking or related services. That’s a 1,525% increase from the 55 million mobile banking users in 2009!

But there’s just one problem with this. And that’s the fact that as more of us use mobile banking on our mobiles, more of us are exposed to mobile banking scams.

The four big scams

Many banks now offer text message services through which you can set up alerts that are sent out when you get too close to your overdraft limit, or you can receive a weekly balance update whenever you spend a large amount on your debit card.

However, if you have a smart phone you can take this one step further and use your mobile to connect to the internet to use online banking services – just as you would on your computer. Some banks may require you to download software to connect you to their banking service and you’ll then be able to keep an eye on your transactions and move your money around.  

But while this can be really handy, it does mean you’ll be exposed to similar risks to those you’d be exposed to if you were just using the internet on your computer, as well as other dangers.

Danger #1

For a start, if you’re connecting to the internet with your mobile, you could be exposed to viruses or hackers who may be able to access your phone, just as they would with your computer. Fraudsters can use a technique called a man-in-the-middle attack to gain access to all the information on your mobile (and therefore your banking details) if you are logged onto a wi-fi network.

Danger #2

You may also find you’re susceptible to phishing text messages or emails – whereby you receive a message from someone claiming to be your bank and asking you to verify your account details by clicking on a link or phoning a number. Perhaps the message is purporting to be about a fraudulent transaction on your account - a double-bluff to make you feel anxious and trusting. However, follow the instructions and you go through to a fake website or call centre pretending to be your own bank. Give away your bank details and you'll get scammed!

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Danger #3

Thirdly, there’s always the risk that someone could steal your mobile phone and therefore have access to all your private information and data – particularly if your settings don’t require you to type in your passwords each time. And if you keep sensitive information on your phone under addressbook entries like 'PIN number' or 'Barclaycard PIN', you're just asking to be scammed.

Danger #4

Finally, just as you need to be careful who’s watching you when you’re entering in a PIN at a cash point or Chip and PIN device, if you’re typing in passwords and other sensitive information on your phone, someone may be able to see you doing this – particularly if you have a habit of checking your bank details when you’re on a packed train on the way back from work.

So if you’re planning to use your mobile phone for your banking transactions, how can you make it safe?

The top dos and don’ts

DO use a PIN to protect your mobile SIM card

That way, every time you switch your phone on or lock your phone, you’ll be asked to enter it. If you can change the settings to ensure that only three failed attempts can be made before the phone is blocked, make sure you do.

DON’T use the same PIN

Use a different PIN for your bank account PIN and your mobile. Otherwise you’re just making it easy for fraudsters!

DO use anti-virual sofware

Use anti-virus software. Just as you would with your computer, you should invest in antivirus software for your mobile. Norton and Kaspersky both offer mobile security packages for £19.99 and these will block malicious viruses, delete spam messages and texts and stop criminals from accessing files on your phone.

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DON’T get sucked in by spam

If you’ve successfully invested in anti-virus software, you shouldn't receive too many spam messages.

However, you should still avoid downloading any attachments from unknown senders on your phone. You should also watch out for phishing emails – your bank won’t email you to ask for security details, so if you receive a message like this, delete it immediately.

DO use a complex password

Use a complex password for the mobile banking system with a minimum of eight characters, using letters, numbers and special symbols.

DON’T store your sensitive information on your phone

It's unwise to store personal details such as passwords for online banking and your credit card PIN on your phone. If someone hacks into your phone, they’ll have easy access to all of this information. Similarly, don’t write passwords and PINs down anywhere.

DO use online banking

Check your bank account on a regular basis to ensure there are no fraudulent transactions. You can do this every time you visit lovemoney.com, if you use our free online banking tool. It's particularly useful if you have lots of different accounts as you can view all of them with a single log-in.

DON’T be lazy about updating your contact details

Tell your bank if you change your phone number to ensure any text messages are sent to the right person.

Related goal

Spend less on your mobile

Hate receiving your mobile phone bill every month? Don’t put up and shut up – find out how to slash that bill and cut your costs!

DO delete your text messages

If you keep text message alerts from your bank and your phone was stolen, fraudsters may be able to use these texts to their advantage.

DON’T share your personal details with cold callers

If you are sharing your personal details on the phone or by email, make sure you know exactly who you are dealing with and that they are from a legitimate organisation. If you have received a phone call, it can be a good idea to hang up and phone back yourself.

DO report a lost or stolen phone immediately

You need to report a lost or stolen phone immediately to your bank as well as the police, and arrange to deactivate your mobile banking service.

DON’T use automatic log-ins

Stop your phone from automatically logging you in to your bank account. Change the settings to ensure you have to enter your password every time. This might seem like a hassle, but at least that way if your phone was stolen, no one would be able to easily access your accounts.

Finally, don’t forget that if you’re looking for an easy way to monitor your bank account and all of your transactions, the lovemoney.com online banking service allows you to see your transactions on all of your cards and accounts on one page, using one login.

This means you can easily check for fraudulent activity as well as see what you’re spending where and set yourself a budget! Read Why you should use online banking at lovemoney.com for more information.

Thanks to Roamware for some of these dos and don’ts.

More: 14 ways to protect your privacy | The scam that won’t die

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