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Banking Fraud Detection

Online banking usage is at an all-time high, meaning people’s money and assets are more vulnerable to potential fraud than ever before. In this digital age, how can people use fraud monitoring to detect risks early and keep them from becoming full-blown fraudulent cases in the future? The answer is awareness. 

Make yourself familiar with the most common types of banking fraud and discover how you can identify suspicious activity to keep yourself safe by using this blog as your guide.


Most Common Types of Banking Fraud

Financial institutions use fraud detection in banking technologies and strategies to keep potential fraud from derailing their business. These safety measures can help banks stay one step ahead of cyber criminals to keep their clients’ personal information, like a credit card number or online banking password, and assets safe. 

As technology advances, it becomes more difficult to stay ahead of fraud risk. This is due to increasingly sophisticated techniques used by criminals, emerging technologies, and the rapidly evolving threat landscape.

There are several fraud types to be cautious and aware of, but two stick out as the most commonly used by scammers: wire fraud and check fraud. Wire fraud is a type of fraud that involves the use of some form of telecommunication or the internet to call, fax, email, text, or direct message to complete a criminal action. Check fraud is a type of banking crime that involves writing bad checks, stealing and altering checks, or forging checks for illegal financial gain or payment fraud. 


How To Detect Fraud

For most scam types, it pays to be vigilant and do your due diligence in every possible scenario. Here are some ways to detect most cases of fraud:

Be Skeptical of Requests for Personal Information

Fraudsters may ask for personal or account information under the pretext of verifying your identity. Your bank should never ask for your personal information in this way, so be aware when being asked for this type of insight.

Verify Requests

If you receive a request to wire money, especially through email or other electronic communication, verify the financial transaction request through a different communication channel before taking any action. 

Check Email Addresses

Before sending an email, carefully review the sender’s email address to ensure there aren’t subtle differences. In the digital banking sector, cybercriminals have become very good at making minor, hardly noticeable adaptations to emails to trick the receiver. 


Actions To Help Prevent Wire Fraud

Wire fraud is one of the leading money laundering scams that people fall victim to each year. That being said, there are ways you can keep this type of fraud from happening to you:

  • Do not click on unknown email links or attachments. Cathay Bank will never ask for confidential information like card numbers, PIN numbers or passwords.
  • Always closely read the sender’s email address of every single email, and check for misspelled words. For example, uppercase “i” and lowercase “L” are deceptive characters and are difficult to notice at a quick glance.
  • Call the vendor by the valid number listed on their website or on file to confirm the validity of the provided information.
  • Never share your passwords.
  • Passwords should not be the same for all applications.
  • Change your passwords on a regular basis. And quickly change your login credentials if your account appears to have been compromised.
  • Be aware of phishing scams and fake websites. Cathay Bank will never ask for your password or account number(s) in an email. Also never use the links to our website from an email; always log onto the website directly by typing it into the web browser.


Actions To Help Prevent Mail Theft

Mail theft is also a serious problem, but you can be protected by taking action quickly. Here are several steps you can take to prevent fraud related to mail theft:

  • Don’t let mail sit in your mailbox, whether it is incoming or outgoing. You can reduce the chances of being a victim of fraud by simply collecting your mail from your mailbox each day. 
  • Deposit any outgoing mail through several secure manners, including inside your local Post Office or at your place of business. You may also hand any mail to a letter carrier.
  • Sign up for Informed Delivery from USPS to receive daily digest emails which send a scanned preview of your incoming mail and packages scheduled to arrive soon.


Customers should report stolen mail as soon as possible by submitting an online complaint to the Postal Inspection Service at or calling 877-876-2455. 


Additional Safety Tips

On top of the already discussed protective measures you and your family can take to secure your personal and financial information from fraud, here are some more safety tips, thanks to USPS:

  • Sign up for positive pay: Businesses can opt into a bank’s “positive pay” services with a business checking account. Positive pay means clients pre-authorize checks for a certain amount as well as the check number, cutting down criminals’ ability to wash the check and withdraw money for an amount that isn’t pre-authorized.
  • Consider using other forms of payment other than check writing. 


What Is Identity Theft?

Identity theft is fraud committed or attempted using the identifying information of another person without authority. Identifying information is any name or number that may be used alone or in conjunction with any other information, to identify a specific person, including any: 

  • Name, Social Security number, date of birth, official state or government issued driver’s license or identification number, alien registration number, government passport number, employer, or tax identification number.  
  • Telecommunication identifying information or access devices. 

The creation of a fictitious identity using any single piece of information belonging to a real person falls within the definition of identity theft because such fraud involves using the identifying information of another person without authority.


How To Prevent Future Losses

Here are some helpful insights to be aware of to keep yourself safe and keep potentially fraudulent activity under control:

  • Consider placing a credit freeze by contacting the major credit reporting agencies (Experian, Equifax and TransUnion)
  • If you feel you’ve been a victim of Identify Theft, you may consider making use of a recovery plan as identified by the Federal Trade Commission at:
  • Obtain a free copy of your annual credit report to verify personal information.

Helpful websites and phone numbers to have on hand:


Prevent Digital Banking Fraud With Cathay Bank

At Cathay Bank, we know how important the right risk management and fraud prevention strategies are. That’s why we strive to have the most secure processes possible to keep our client’s and their personal information safe from fraudsters. 

Learn more about how to keep your financial data safe by contacting Cathay Bank today.

This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.

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