5 Steps to Take if You Have Experienced Banking Fraud

5 Steps to Take if You Have Experienced Banking Fraud

November 22, 2023

Banking fraud is a stressful experience, because it involves the loss of your personal information and at least some of your money. However, it is also a common occurrence. About 111,000 Americans experienced banking fraud in 2022. If you have been left feeling vulnerable after a scam or after experiencing any form of identity theft, there are two things to remember: It is not your fault and you can recover. Here are 5 of the most important first steps you should take when you have experienced banking fraud.

Stop any payments immediately

Once you lose money to a scam, chances are slim that you will get that money back. Do not try to recover it by spending more money. For example, fraudsters may ask you to pay fines, fees, or penalties to get returns on your investment. Recovery scams often promise to recover your money - If you pay them. The reality, however, is that you lose both your initial funds and the money you give to the recovery scammers.

Instead, the first step you should take if you suspect you are the victim of fraud is to top spending money. In addition, you may need to contact your financial institution in order to put a hold on any payments that are still in process. Doing so can minimize your financial losses while you work with your bank to recover from the fraud.

Assess your finances

You may have identified one fraudulent transaction, but if you are the victim of identity theft, or if someone has accessed your personal banking accounts, it may not be the only suspicious activity on your account.

As a result, take the time to carefully assess all of your finances in order to catch any other problematic transactions or activity. Here are some the ways in which you can do so:

  • Evaluate your bank account statements.
  • Evaluate your credit card statements.
  • Check your credit report.
  • Check any credit card monitoring services you are a part of.

Notify your financial institution

As soon as you are aware of fraudulent activity, and have an idea of how extensive that fraud is, contact the relevant financial institutions to report the fraud. These institutions can freeze your accounts and cards and help you navigate the next steps of dealing with the fraud. Often, these companies have a dedicated fraud department. Reach out to that department first for expert help in managing your problem.

In addition, you may need to contact other companies and their fraud departments. For example, if someone has opened a fraudulent account under your name, you will need to contact that company' fraud department in order to get the account shut down.

In order to protect yourself, make sure to get the right documentation as you work through this process. Make sure you receive confirmation of these things:

  • That the account is fraudulent
  • That the account is closed
  • That your name has been removed from the account
  • That any fraudulent charges have been removed from your credit report

Report the fraud to the major credit bureaus

Once you have identified the extent of the fraud, and notified all relevant financial institutions and companies, you will need to report the fraud to the three major credit bureaus. Fortunately, as long as you report the fraud to one company, they will alert the others. When reporting this fraud, you have several options for protecting yourself:

  • Freeze your credit report to prevent anyone from opening an account using your credit
  • Place a fraud alert on your report that requires lenders to contact you before approving loans

These options usually last a set period of time, usually a year, unless you lift them earlier. Sometimes, you can get these extended. For example, an extended fraud alert can last for up to 7 years.

Report the fraud to the FTC

Finally, make sure the Federal Trade Commission (FTC) is aware of the fraud. Through them, you can create an official record of the fraud, which can help you in investigations and in getting your credit repaired. The FTC will also provide you with a personalized plan for recovering from the fraud.

Once you contact the FTC, law enforcement agencies can access the report. However, you may need to file a report with them yourself in order to get the investigation going into the fraud you have experienced.

When going through any type of banking fraud, you need a partner on your side. At Bank of South Texas, we offer ongoing support if you are the victim of a scam. Plus, we make it easy to implement strong security measures to prevent and recover from fraud. Contact us today to learn more about how we can support your banking needs and help you keep your private financial information secure over the long term.