Financial fraud has become an increasing concern globally. Cybercriminals target unsuspecting individuals and businesses, steal their banking details, and thereafter make unauthorized banking transactions, using fake identities to access funds.

The Federal Trade Commission reported that in 2022,  consumers reported losing nearly $8.8 billion due to scams.

If you notice any suspicious activity on your bank account, such as unauthorized withdrawals, fake alerts, or sudden account restrictions, don't hesitate to take action immediately.

This article helps to explain:

• How to identify fraudulent activity

• How to report suspicious transactions

• How banks investigate fraud

• Actions to take if your account is compromised 

• How to prevent future fraud

 

What Is Considered Suspicious Activity on a Bank Account

 

Banks pay close attention to accounts for unusual behavior that may indicate fraud or suspicious activity is taking place. Be on the lookout for these warning signs:

 

• Unauthorized Transactions: Money is withdrawn, transferred, or spent that you did not authorize.

• Multiple Failed Login Attempts: A failed attempt by someone to access your bank account with an incorrect passwords multiple times.

• Large or Frequent Transfers: An unexpected large or frequent transactions from your bank account, especially to unidentified accounts.

• Logins from Unknown Devices: Your account is accessed using a new device or from a new location.

• Phishing Messages Impersonating Your Bank: Emails, texts, or calls claiming to be from your bank asking for personal details (How to report phishing scams is discussed later).

If any of this happens, you must report them immediately to your bank.

A 2023 report from Javelin Strategy & Research found that identity fraud losses reached $43 billion, emphasizing the need for immediate reporting of such activities.

 

Interesting read: Suspicious Transaction Reporting 

 

How Banks Detect and Investigate Fraud

 

Banks use advanced fraud detection systems to track suspicious bank activity. Here’s how they handle fraud:

 

• Fraud Alerts: Banks send SMS or email alerts when they detect a questionable transaction.

• Temporary Account Freezing: To prevent losses, the bank may restrict transactions until verification.

• Suspicious Activity Reports (SARs): If fraud is confirmed, banks file SAR reports with law enforcement.

• Fraud Investigations: Banks review transaction history, IP addresses, and account access logs to identify scammers.

If your account is frozen or flagged, contact your bank for verification to restore access.

 

Related: What are the Causes of Financial Fraud and Identity Theft

 

How to Identify and Report Fraudulent Bank Activity

 

Recognising Suspicious Transactions

 

These are the things to look out for while checking your bank account:

 

• Unknown charges: Even in small amounts can indicate testing by fraudsters.

• Fake transaction alerts: Messages asking you to confirm payments you didn’t make (bank suspicious activity call).

• Duplicate withdrawals: Debit amounts twice for a single transaction.

• Unexpected declines: You find that card is declined for no reason, even when you have sufficient funds in your account.

 

You can also read Account Takeover Fraud: Protecting Yourself from Online Theft 

 

How Do I Report Suspicious Activity on My Bank Account

 

Report a fraud via the app or website of your bank using these steps:

 

1. Log in to your account, then find a section labeled "Report Fraud". 

2. Click on the suspicious transaction and provide details. 

3. Attach proof, if applicable (screenshots, bank statements). 

4. Submit your report and contact customer support for urgent cases. 

Example: If someone withdraws ₦50,000 without your permission, report it immediately to stop further unauthorized access.

 

How to Report Fraudulent Bank Calls or Texts

 

Fake messages are often sent out by scammers, pretending to be from your bank.

 

How to verify messages and calls:

 

1. Use the official bank phone number (one that was not provided in the message).

2. Check that the sender ID matches that of all official communications from your bank.

3. Never click on unexpected messages with any link.

 

Where to report fake bank messages:

 

• Forward phishing text messages to the fraud department of your bank.

• Scam calls (bank suspicious activity call) should be reported to financial fraud authorities.

• Block the number of the scammer.
 

Further reading on Fraud Prevention Solutions for Banks

 

What Is a Suspicious Activity Report (SAR)

 

A Suspicious Activity Report (SAR) are the confidential documents that banks file with financial crime authorities when they suspect potential fraud.

 

Why Do Banks File Suspicious Activity Reports (SARs)?

 

Banks file Suspicious Activity Reports (SARs) to comply with anti-money laundering (AML) laws and other financial crimes like fraud, terrorism financing, and money laundering. These reports are submitted to financial regulatory authorities when a bank detects that unusual transactions or potentially illegal activities have taken place.

 

Key Reasons Banks File SARs

 

1. Unusual Transaction Patterns: Large cash deposits, transfers that are done immediately, or frequent transactions without any justifiable business purpose.

2. Structuring (Smurfing):  Breaking large transactions into smaller ones so they will not reach the reporting thresholds.

3. Identity Fraud: Opening accounts with false identities or stolen identities.

 

How SAR Reporting Helps Prevent Fraud

 

1. SAR reporting are used by banks to track fraudulent transactions across different accounts.

2. SAR reports are used by law enforcement officers to investigate and catch fraudsters.

3. Reporting fraud early helps prevent larger financial crimes.

3. SAR reports be used as an alert signal to avoid bigger financial crimes.

 

Can Customers Request a SAR?

No. Customers cannot request a SAR. What is a SAR? It is a confidential report used for investigations. Although, customers can request a fraud investigation from their bank.

 

What to Do If Your Bank Account Is Affected by Fraud

 

Steps to Take If You Are Scammed

If your account has been compromised, act fast:

1. Freeze your account: Call your bank or use their app to lock up your card.

2. Change all passwords: Update your banking and email login details.

3. Report the fraud: Contact your bank and fraud authorities.

Under the U.S. Electronic Fund Transfer Act (EFTA), you are only liable up to $50 if you report unauthorized transactions within two business days. After going on for 60 days, your liability may increase.

4. Check recent transactions : Check for any other unauthorized activity.

Example: If ₦100,000 is missing from your account, freezing it can prevent more losses.

 

Related: 12 Common Types of Bank Fraud and Prevention Methods

 

What to Do If Your Bank Calls About Suspicious Activity

 

• Determine the nature of the flagged transaction.

• Make sure the caller's identity is true before giving information.

• Check your account yourself to see confirmation of any fraud. 

 

What to Do If Your Account Is Blocked Due to Fraud

 

Banks freeze accounts to prevent fraudulent activity. Now, if your account is frozen:

• Call customer service to verify your identity.

• Submit the required documents (ID, proof of transactions).

• Follow through until your account is restored.

 

What to Do If Your Bank Closes Your Account Due to Suspicious Activity

 

Banks close accounts that are associated with fraudulent activities. In this case, you can:

1. Ask for an explanation from the bank.

2. Demand a refund if there is money left in the account.

3. Get a new account with stricter security measures.

 

How to Report a Scammer’s Bank Account

 

To report a fraudulent account, you should do the following:

• Report it to your bank's fraud department.

• Report it to the law enforcement agencies

• Report it to the financial crimes enforcement authorities.

Depending on your country, you can report the issue to the relevant authorities as follows: 

U.S.: Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB). 

UK: Action Fraud. 

Nigeria: Economic and Financial Crimes Commission (EFCC).

 

Also read How to Avoid Identity Fraud as a Fintechs User in the UK

 

How Banks Investigate Fraudulent Accounts

 

• Banks track suspicious activity by analysing the frequency of patterns in bank transactions.

• They can freeze the account of the scammer.

• They also report the cases to fraud agencies.

 

How to Prevent Future Fraud on Your Accounts

 

Best Practices to Keep Your Bank Account Safe

 

1. Use strong passwords: Don't use personal information like your name or birthdate in the password.

2. Enable Two-Factor Authentication (2FA): Adds another layer of security.

3. Set Up Transaction Alerts: Get notified of every transaction.

4. Monitor Your Account Regularly: Examine your bank statements for discrepancies.

 

How to Avoid Phishing Scams

 

• Do not click on links in unknown messages that claim to be from your bank.

• Always type your bank’s website manually rather than using search results.

• Ignore requests for sensitive information like User IDs, PINs and passwords, etc.

 

Conclusion

 

Anyone can be scammed. But taking the proper precautions can protect your money and personal data.

 

• Always monitor your bank account for suspicious activity.

• Report suspicious transactions immediately to prevent more losses.

• Stay informed about fraud tactics and make sure you do not fall into their trap.

Your bank has security measures to protect your account, but you play the key role in preventing fraud. Report to your bank immediately if you suspect fraud. 

Stay ahead of fraud with Youverify’s identity verification and fraud prevention solutions. Book a Demo with us today.