13 Tips from Guaranty Bank & Trust to Avoid Fraud During the Pandemic

By: Natalie Saikowski Goertz, Senior Vice President, Guaranty Bank & Trust

When was the last time you reviewed your banking relationship with your banker or relationship officer?  Are you in the most appropriate bank account type for your activity and balances? Do you bank at a big bank, community bank, and/or credit union?

I would encourage you to meet with your banker or relationship officer on an annual basis to discuss any changes within your business, identify possible changes in products offered as well as pricing to ensure you are utilizing the appropriate bank account type and services.

Criminals, by nature, become more active during times of economic hardships, so let’s talk about ways you can mitigate risk and fraud on your accounts.  First and foremost, you need to know that commercial and consumer customers have 30 days from date of receiving their bank statement in the mail to file a dispute.  However, banks do not have to give commercial customers provisional credit within the 1^st 10 days of the claim like they do on a consumer account.  This is often not discussed, so please make sure you know these rules.

Ways to Mitigate Risk and Fraud:

1. Daily reconciliation of all bank accounts – It is important to reconcile all bank accounts daily as to quickly identify fraudulent activity so you can file a police report, complete bank documentation and provide the bank with time to research the transaction, as they do not have to put the funds back into your account immediately, which can affect your cash flow, automatic debits, etc.
2. Implement fraud prevention services and form that partnership with your bank – Positive Pay prevents check fraud and ACH Debit Block/ACH Positive Pay prevents electronic fraud. Together, these services complement each other and make up fraud prevention services.
3. Implement dual control as available for money movement transactions – Examples would be ACH Origination for direct deposit or vendor payments, online originated wires and fraud prevention services.
4. Account take over – Fraudsters who gain key details of an individual’s account can make card purchases, withdrawal funds or access other accounts, so this is where daily monitoring becomes so fundamental. Account takeover fraud is one of the hardest types of fraud to identify because of the multichannel account access and the desire to reduce friction in the consumer experience.  New technology is available to help mitigate risk and improve the consumer experience, yet often goes unused or is unavailable to consumers. Criminals are adapting to new technology faster than consumers.  During the next year, criminals are projected to strike at the heart of the financial services industry and negatively affect consumers. Areas of concern range from fraudulent account openings (fake identities), person to person, and full takeover of all accounts.  Account take over can be applicable to not just checking accounts or credit cards, but also investment accounts and other high-dollar balances. Criminals will always try to take what isn’t theirs, and right now it is too easy.
5. Establish two-factor authentication wherever possible, but guard the one-time passcodes closely by not divulging them via text or phone call. Enabling two-factor authentication on sites that have that capability is a great idea, as fraudsters may attempt to steal your password and one-time secondary passcode. For sites without two-factor authentication, use strong passwords or a password manager to secure highly complex and varying passwords on accounts.
6. Work with your financial institutions to set up text alerts, which can help prevent payment disruption and minimize fraud exposure. A variety of financial service providers, including banks, credit card issuers and brokerages, provide their customers with the option to receive notifications of suspicious activity, as do businesses in other industries, such as email and social media providers. These notifications can often be received through email or text message, making some notifications immediate, and some go so far as to allow their customers to specify the scenarios under which they want to be notified, which can reduce false alarms.
7. Debit Card vs Credit Card – Debit cards are tied to the cash in your bank account and can disrupt your cash flow should the card become compromised. While I would not encourage anyone to get into credit card debit, a low balance credit card that is paid off on a frequent basis is a more secure alternative that is not tied to the cash in your bank account.
8. Safeguard personal information – Do not disclose your social security number, PINs, passwords or other identifying information tied to your account. If someone calls you requesting this information, do not give it out.  Consumers need to adopt a zero trust contact policy. There are so many socialized scams today that leverage one-time passcodes and fraud verification services in order to perpetrate payment fraud and account takeover fraud. Most consumers fail at questioning the authority and authenticity of a text or caller and the damage can be rapid and costly. The only acceptable action when receiving unexpected contact with a potential imposter is to exhibit zero trust. The new mantra is “Hang up and call your financial institution.”  Financial institutions will never call you asking for this information.  The challenge of reducing fraud losses is not always the lack of technology available.  It can be the failure to focus on increasing consumer adoption of safer methods of safeguarding their information and managing their finances.
9. Be cautious when using remote terminals or kiosks, including pay at pump gas or ATMs.
10. Secure your devices. With consumers increasingly relying on their digital devices to access financial services, make purchases and share personal information, criminals have shifted their focus to these devices for the access they can provide to accounts and the information they store or transmit. Consumers should secure online and mobile devices by instituting a screen lock, encrypting data stored on the devices, avoiding public Wi-Fi and/or using a VPN, and installing anti-malware. Anti-malware protection is essential for all devices.
11. Place a security freeze on credit reports. Placing a freeze on your credit reports can prevent anyone else from establishing new credit in your name and there is no cost to initiate. This security measure is especially important if you have been a victim of a data breach that has exposed sensitive, personally identifiable information. Credit freezes must be placed with all three credit bureaus and will prevent anyone except for existing creditors and certain government agencies from accessing your credit report. Should you need to open an account requiring a credit inquiry, the freeze can easily be lifted for up to 90 days or more through the credit bureaus websites and or smartphone apps.
12. Can your financial services provider easily locate and contact you? Consumers often forget to update new addresses and phone numbers with their financial institutions and lenders. Payment cards are so popular today that they continue to work as long as there are funds to support them and this usually translates into a disconnect between the consumer and the provider when valuable information has to be exchanged via U.S. mail, email, or voice communication. Remember: You cannot receive a fraud alert if your new cellphone number has not been updated.
13. Banks and credit card companies are setting transaction limits to help safeguard against card abuse. Limits are based on transaction history.  Please do not get upset if you have a transaction declined.  It’s for your own safety!

As fraud evolves, evaluate your circumstances, and implement risk management strategies.  If you are not currently using fraud prevention services on your commercial bank accounts, I would encourage you to have that conversation with your banker to learn how theirs works, cost, and then implement.  The cost of risk and cybersecurity insurance increased by 25% as of January 2020 due to losses in prior years, so the fraud prevention services route is a lot more affordable on a month to month basis.

Natalie Saikowski Goertz and her team at Guaranty Bank & Trust pride themselves in providing sound fiscal advice and assistance to businesses and individual clients in our community both before and during the pandemic.  For more information about business banking: