Money Smarts Blog

In today’s world, digital wallets are becoming the go-to way for many people to pay for goods and services. Whether it’s Apple Pay, Samsung Pay, or Google Pay, these convenient mobile wallet options let you make quick, secure transactions at the tap of your phone. But as we all know, where there’s convenience, there’s also the potential for fraud.

Let’s dive into how digital wallet fraud happens, what you can do to protect yourself, and how to spot any suspicious activity.

What is digital wallet fraud?

Digital wallet fraud occurs when a bad actor (aka a fraudster) learns how to steal a “token” that’s linked to your mobile device. This token allows them to make contactless payments at a point-of-sale terminal — payments that seem secure because they’re contactless. But the transaction may not be authorized, and that’s where fraud creeps in.

How does it work?

A fraudster tricks you into giving away your card details. They might impersonate your credit union, calling, texting, or emailing you, asking for your card info to "enroll" you in a digital wallet.

With that stolen card information, the fraudster gets a token provisioned to a device in their possession.

Once they have the token, they can make purchases, usually gift cards, since they’re harder to trace, at various merchants.

How can you protect yourself?

Never share your card info: Your credit union will never ask for it via phone, text, email, or chat. Always be cautious if someone does.

Verify your device: Ensure the device linking to your wallet is truly yours.

Monitor transactions: Watch for unusual charges, like large purchases or gift card purchases, especially early after enrollment.

Know what to look for:

• Unauthorized transactions: Watch for unexpected charges, especially those that seem out of place or unfamiliar.
• Rogue apps: It's important to be cautious about downloading or using suspicious apps. Some malicious apps can manipulate or deceive payment systems (like those at stores or online) to process transactions without your permission.
• Gift card purchases: Fraudsters love to buy gift cards because they’re harder to trace. So, if you see a lot of identical transactions or round dollar amounts without any cents, it’s worth investigating.
• Unfamiliar devices or logins: If you notice new devices or logins linked to your digital wallet that you don’t recognize, it could indicate fraud.
• Unsolicited requests for card info: Never share your card details when someone contacts you unexpectedly. This is a common fraud tactic.

Set up fraud alerts: Through text messages, emails and phone calls, we can notify you immediately if we notice a potential fraudulent transaction on your debit or credit card.

Stay informed: Learn how fraud works and stay on top of transaction notifications to spot potential issues early.

By staying informed and cautious, you can help protect yourself and keep your account secure. And as always, if you suspect fraud on any of your accounts, reach out to us immediately.

📱 Secure chat: IHMVCU.org/Chat
📞 Phone: 309-793-6200 or 800-722-0333