Preventing Fraud

Posted by admin on October 15, 2007 in Misc.

Last week, I posted on my experience with ATM fraud. My bank still has not resolved the issue yet (they did tell me they would have an answer between 7-10 days which is the middle of this week). As one of the preventive measures (and based on some great tips from readers), I am in the process of reducing my ATM daily withdrawal limit. My ATM card is not linked to anything other than my bank account but you may want to think about de-linking your ATM card to your credit card, LOC or other accounts and just have the ATM card access one account.

But this experience has made me much more aware of preventing any type of fraud and I will share with you some tips I have learned. The point is not to prevent fraud totally- if someone really wanted to rip you off they will- but to minimize someone from doing it.

Passwords/PIN Numbers: Rotate your passwords for any on-line access. In an ideal world, make your password a very common word so that a spyware program may not pick up that something uncommon you are typing every week or so which may indicate it is a password (I do understand that spyware programs are quite advanced so please clean your computer often too). Do not have the same password for your ATM card, credit card, on-line access- you are inviting someone to commit wholesale fraud on you. Yes, its more numbers to remember but its better than having your bank account and credit card drained.
Telephone/Online access: Never do your telephone banking on a cordless/cell phone. Please can steal your signals (in one of my old places, I use to pick up the phone and hear the neighbors conversation for whatever reason) and I still don’t trust cell phones as completely secure channels of communication. Instead, do it on a conventional land-line. Never access on-line banking while you are downloading/uploading and please install spyware programs on your computer. As a tip, unplug your internet access at night to minimize hacking.
Pay Cash: People cannot steal your bank numbers/credit card account number/PIN if you pay cash. Its also a good budgeting tool. As always, cash is king for a variety of reasons.
Names: Try to get a bank card without your name on it (I believe some banks now only issue bank cards with numbers and no names). It prevents someone from cross-referencing your name with other publicly available information.
E-Commerce: Have one card you use for all e-commerce and make sure the credit limit on it is modest. The less numbers you have floating around the better and, if someone were to steal the numbers on-line, at least you minimize the damage they can do if your credit limit is small.

Let me know if you have any other tips. Thanks.

3 Comments on Preventing Fraud

By Jim on October 15, 2007 at 2:42 pm

Hi. Just discovered your blog today. Very interesting and informative.

Just an expansion on point #3 (pay cash). This really comes down to being very careful where you use your debit / credit card. I actually rarely pay by debit, and I never pay by debit at a mom / pop store (small biz, restaurant, gas), or one that I have not visited before. The debit fraud cases that I have heard of are all by small mom / pop operations. Here in Ottawa the was a case involving a mom / pop restaurant recently. A year or 2 ago in Montreal a group of small business owners were charged with tampering with pin pads.

At least with a credit card there is a $50 (banks with usually wave this) limit of responsibility if you report the fraud right away and did not outright give your card away. With debit fraud THE MONEY IS GONE and you just wait for the bank to make some arbitrary decision whether you should get any money back (in 2 weeks, a month or never).

Another obvious thing is never let the card leave your sight (or they can double swipe it or copy info down). It takes a bit more planning to pay with cash, but it’s worth it.

By George on October 15, 2007 at 3:58 pm

I definitely disagree with your tip about choosing a “common word” as a password. Doing so makes your password vulnerable to a dictionary attack. If you’re computer is infected with any sort of keylogging software, it won’t matter whether the password is simple or complex.

To generate secure, totally random, and easy to remember passwords, I highly recommend using the diceware method (search Google for diceware to find it). Basically, you create passwords out of a string of common, but randomly selected words (the words are generated via dice rolls).

One tip regarding online banking – never log in to your online banking using a computer that you don’t control. If you log in via a computer at an Internet café, for example, you’re leaving your user ID and password vulnerable to keystroke-logging software. At least if you own and control the computer, you can be pretty safe in assuming it hasn’t been compromised.

By admin on October 15, 2007 at 4:24 pm

Jim and George: Thanks for the great tips. George- I had forgotten about the logging in at public places. Thanks for reminding me.