How to Protect Your House and Assets from Cyber Fraud

Q: Your recent article that discusses the increasing number of cyber hacks and perils of online transactions recommended moving as many of your bills online. This sounds like bad advice given the whole point of the article.

Could you please elaborate on how doing more online transactions such as bills would be safer? I pay my mortgage by check each month and think this is a safer alternative.

Protect your house and assets – pay bills digitally

A: Checks may seem safer, but they are not. Not by a longshot. That’s why we stand by our suggestion that you use your bank’s auto-debiting feature to pay as many of your monthly bills as possible.

Cyber security and fraud protection have become huge issues in financial services. Recently, there have been more incidents in which fraudsters intercept mail destined for payment centers. They comb through trash, steal mail from mailboxes, and find other ways to steal checks. They change the payee on the check and cash it. Then the bank has to recover or replace the funds and you have to pay the intended bill a second time – hopefully without incurring a late fee.

Your bank may offer online check payment. We don’t really like that either. With online check payments, some banks use a system where they send out paper checks to your intended recipient. Those checks are susceptible to being intercepted and cashed. This happened to Sam some years ago when he sent out a large payment. The check was intercepted, the payee name was changed and the check was cashed. It took several months to clean up the mess. Sam didn’t lose any money but had to pay the bill again and wait for the funds to be placed in the account by the bank.

Protect your house and assets by paying your mortgage via lender’s online portal

Most mortgage lenders allow you to set up an account on their online portal. You can connect the accounts so funds will be taken digitally from your account and used to pay the mortgage. You can typically designate the day of each month to make that mortgage payment. The mortgage lender initiates the electronic transfer of the funds to pay your monthly mortgage payment and securely receives the funds.

Almost all major credit cards offer the same convenience. You connect the account to your bank account, designate the day of the month you want your payment to go through and it will happen. Automatically. Bonus: you’ll never pay another late fee again.

Writing checks puts you at risk for cyber security fraud

We understand that for anyone living paycheck-to-paycheck, the certainty of having funds taken out of an account electronically may not work. If you only write out a check once you know funds are available in your account, you may not want to set up an automatic payment, just in case a check doesn’t clear.

But when you consider that most homeowners regularly write out checks for mortgage loans, electricity, gas, water, sewer, garbage, telephone, internet, cable, real estate taxes, credit cards, income taxes, subscriptions, auto loans, and student loans, many of these can get paid electronically through your bank. And if you’re renting, you’re still writing regular checks for your rent, utilities, and cell service, among others. Again, these accounts can be auto-debited directly from your checking account.

Pay electronically to protect your house and assets

We believe the more payments you are able to pay electronically through the systems created by the financial services world, the safer you are likely to be.

Several years ago Sam had a client that told him that she had never set up an online account and felt that she was safer having never set up an online presence. She was so proud of it – until Sam let her know that she was likely less safe without an online account than with it. When you have no online account, fraudsters can impersonate you and create a profile for you. Once they create a profile, they may be able to get credit in your name and use your identity to set up an online account at your banking institution.

How to create a strong password to protect your house and assets from cyber fraud

Remember, once you set up your username and password with a financial institution or any of the companies we’ve mentioned above, you want to make sure that you use what’s known as a “strong” password. This is a password that’s difficult to crack. You should also use a two factor authentication (also known as 2FA) system when you set up your accounts.

Many of our readers either don’t use or even know what two factor authentication is. When you set up an online account, that website won’t let you sign in a second time unless they verify your identity when you try to log in again. For example, if you’ve set up an account with a bank and you’ve used your cell phone number for your contact information, the second time you log back in, the bank will send a text message to your phone with a code to verify it is you trying to log in.

Use 2FA (two-factor authentication) to protect yourself and your assets

This way, you use your name and password to log into the account. But you can’t get in until you also provide the code sent to your phone. There are other systems banks use to verify that it’s you. There are mobile applications that generate an authentication code. You plug in that verification code when you log in to verify your identity.

Think of these systems as a second layer of security. And, you should also use this second layer of security with your email accounts. Many people use their email to verify their identity. Don’t want make it easy for a thief to steal your identity and your money.

Learn how to protect your house and assets from cyber fraud. Watch these videos.

Ilyce’s financial wellness company, Best Money Moves, offers some free informational videos in conjunction with One Brightly Cyber. These provide important insights about your cyber security. You can learn how to set up a strong password. View them here.

In your case, we think you should set up your account with your mortgage lender and have funds debited by the mortgage company from your bank account of your choosing. Good luck, and stay safe.

How to Protect Your House and Assets from Cyber Fraud