With the widespread adoption of digital and online banking tools and services, fraudsters are increasingly targeting the digital account opening process to exploit vulnerabilities. Whether you’re opening a bank account, signing up for a digital wallet, or registering for a financial service, it’s important to be aware of risks and protect yourself. Here are key tips to help you avoid digital account opening fraud.

What is Digital Account Opening Fraud?

Digital account opening fraud occurs when fraudsters use stolen or fabricated identities to create new accounts online. These fraudulent accounts can be used for money laundering, phishing, scams or other shady activities. The rise of remote onboarding processes has made this type of service a bigger target for fraud.

Tips to Protect Yourself

• Reduce the risk of your identity being used to open bogus accounts by protecting your personal information. Never share sensitive information like your Social Security number, photos or scans of your IDs or banking details via unsecured channels such as public Wi-Fi.
• Verify the legitimacy of any platform you sign up for. Only open accounts through official websites or verified apps. Look for “https” in the URL and check for spelling errors or unusual URLs or website domain names. Fake websites play a large part in many phishing scams, and they have become very convincing.
• Report suspicious activity immediately. Contact service providers and your bank or other financial institutions right away. Report identity theft to your local authorities and online via www.reportfraud.ftc.gov, www.identitytheft.gov and/or www.ic3.gov (cyber-enabled crime). If personal information was given to a fraudster, www.identitytheft.gov will provide the next steps pertaining to identity theft.

Risk Mitigation Strategies

If you feel your information has been compromised and you are at risk for identity theft, here are some risk mitigation strategies that can be considered:

• Secure your existing accounts with strong passwords and MFA (multi-factor authentication).
• Always use unique passwords to prevent a single data breach from giving bad actors access to multiple accounts. Whenever possible, secure each of your accounts with multi-factor authentication (MFA) and biometrics.
• Set up alerts on existing bank accounts for things like transactions and changes to your profile.
• Sign up for a credit monitoring provider. Look for a three-bureau credit monitoring provider. It's important to review your credit file at each of the three reporting agencies.
• Enable real-time alerts. If your information is at risk, acting fast can save you from losses. Set up alerts to receive notifications about any credit inquiries, new applications, or changes to your accounts.
• Freeze your credit reports with all three bureaus. A credit freeze is a temporary block on your credit file that stops anyone from accessing your reports or opening new accounts. Placing a freeze will help protect you from fraud or financial loss. A credit freeze is a free service, and it does not impact your credit score.
• To freeze your credit, you'll need to contact each of the three major credit bureaus, prove your identity, and request a freeze. This can also be done by creating a free account at each credit bureau’s website (www.transunion.com, www.equifax.com and www.experian.com).

Tips for Businesses

• Strengthen onboarding processes for vendors and services. Develop and implement a thorough screening process to vet potential vendors and partners.
• Implement robust identity verification, such as biometric checks and document verification, for onboarding employees.
• Educate teammates and your customers about fraud risks and safe practices. Implement regular training updates to keep them informed of new threats and fraud tactics.

Conclusion

Although digital tools offer convenience and flexibility, they may come at the cost of being targeted by fraudsters. Whether you’re an individual safeguarding your personal information or a business operator protecting your customers and your brand, awareness is your first and most powerful line of defense against fraud. Fraud prevention is an ongoing exercise. Visit the Cadence Bank Fraud and Security Center to stay informed, stay proactive and learn more fraud tips.

Sources:
https://www.transunion.com/blog/new-account-creation-fraud-and-how-to-combat-it
https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-guidance-to-rein-in-creation-of-fake-accounts-to-harvest-fees
https://www.pingidentity.com/en/resources/blog/post/what-is-account-creation-fraud.html
https://www.forbes.com/sites/kellyphillipserb/2025/05/29/15-tips-to-help-you-protect-yourself-from-identity-theft-and-related-tax-fraud

This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.