Mobile-banking security is becoming a growing issue as more and more people use banking apps.
Last year the issue gained the public’s attention when a group of thieves started breaking into lockers at gyms across London to steal bank cards and mobile phones while their owners were exercising.
They were then able to use the cards to go on shopping sprees at stores such as Apple and Harrods. Some of the victims reported that their banks were initially unwilling to refund them, saying that the criminals had used their PIN code, so they must have been at fault (eg, by keeping a note of the code with their cards).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Later the banks gave in as it became clear that the problem was not their customers’ carelessness, but weak points in mobile-banking security.
Common bank app scams
There’s no shortage of ways that thieves can try to get into somebody’s account, but many of these involve having some personal information to wriggle around security protocols.
However, what appears to be happening in these cases is simpler. The thief has the cards and the phone. Of course, if they have been able to get a PIN – for example, by watching over the victim’s shoulder as they unlock their phone or use their card – their task is much easier, especially as many people tend to use the same PIN for multiple purposes.
But even if they don’t, they may still be able to get into some bank accounts. The thief installs the mobile banking app for the bank that issues the cards on a new phone and uses the card details to register for it.
Some banks require you to pass detailed identity checks to do this, but a one-time passcode sent to your phone by text message will be enough with others. While the thief can’t get into the original phone, they may be able to read the message in the lock screen if – like many people – the victim has message previews enabled.
Alternatively, they can put the SIM from the stolen phone into another phone. At this point, they can get into the victim’s account via the app, which may allow them to check the PIN for the card or transfer funds to another account, with minimal other security checks.
The apps not vulnerable to scams
Not all apps are so vulnerable: consumer group Which reckons that Lloyds/Halifax, Virgin Money and Barclays are weaker than Chase or Monzo, for example.
But rather than relying on your bank, there are a few steps that can help stop this kind of fraud, beyond obvious ones such as having a hard-to-guess PIN. First, disable message previews so they can’t be seen when your phone is locked.
Second, set a SIM PIN, which stops your SIM being used in a new phone by somebody who doesn’t know the code.
Third, make sure you have Find My iPhone (Apple) or Google’s Find My Device (Android) enabled, so that you can lock and wipe your device remotely if it’s stolen – but note this alone won’t stop a SIM-swap, for example.
-
What will the unravelling of US-China trade mean for the economy?What will a US-China decoupling mean for the global economy?
-
Scottish Mortgage: why we’re turning to private companies and China for exceptional returnsWhen it comes to delivering growth, Scottish Mortgage will stop at no end in its hunt for exceptional long-term returns - this includes China, unicorn companies and sectors such as space exploration
-
Act now to bag NatWest-owned Ulster Bank's 5.2% easy access savings accountUlster Bank is offering savers the chance to earn 5.2% on their cash savings, but you need to act fast as easy access rates are falling. We have all the details
-
Moneybox raises market-leading cash ISA to 5%Savings and investing app MoneyBox has boosted the rate on its cash ISA again, hiking it from 4.75% to 5% making it one of top rates. We have all the details.
-
October NS&I Premium Bonds winners - check now to see what you wonNS&I Premium Bonds holders can check now to see if they have won a prize this month. We explain how to check your premium bonds
-
Bank of Baroda closes doors to UK retail bankingAfter almost 70 years of operating in the UK, one of India’s largest bank is shutting up shop in the UK retail banking market. We explain everything you need to know if you have savings or a current account with Bank of Baroda
-
How to earn cashback on spendingFrom credit cards and current accounts to cashback websites, there are plenty of ways to earn cashback on the money you spend
-
John Lewis mulls buy now, pay later schemeThe CEO of John Lewis has said the retailer will consider introducing buy now, pay later initiatives for lower-priced items.
-
Paragon raises rate on one-year fixed cash ISA to 5.75%Paragon Bank ups its one-year fixed cash ISA rate to 5.75% - is it enough to top the table?
-
Shawbrook ups rate again on easy access saver products – how does it compare?Shawbrook bank has hiked the rates on its easy access saver and ISA again – but does it compete with other rates on the market?
