How To Protect Your Bank Account From Identity Theft

The best way to protect your bank account from identity theft is to layer your defenses: use a passkey or a strong, unique password with multi-factor authentication, watch your accounts closely for signs of trouble and move fast if you suspect a compromise.

The FTC's Consumer Sentinel Network logged 1,135,291 identity theft reports in 2024, the most recent full year of data, up 9.5% from 1,036,855 in 2023.

Here's how to keep your bank account off that list:

Key Takeaways

• Identity theft is common and rising again. The FTC logged over 1.1 million identity theft reports in 2024, a 9.5% jump from 2023 after two years of decline.

• Passwords still matter, but the threat has shifted. Verizon's 2026 Data Breach Investigations Report found stolen credentials still show up in 39% of breaches somewhere in the attack chain, even as software vulnerabilities overtook them as attackers' top entry point for the first time in 19 years.

• Not all two-factor authentication protects you equally. SMS codes are the weakest MFA option since they're vulnerable to SIM swapping. A passkey or physical security key is the strongest and is gaining fast: the FIDO Alliance found 75% of consumers have enabled a passkey on at least one account as of 2026.

• Monitoring catches what prevention misses. Account alerts, credit monitoring and regular statement reviews help you spot fraud early, before the damage compounds.

• Speed matters if you're compromised. Freezing your credit, contacting your bank directly (never through a link in a text or email) and reporting to the FTC as soon as you suspect a breach all improve your odds of limiting the damage.

Summary generated by AI, verified by MoneyLion editors

How Do Hackers and Identity Thieves Get Into Your Bank Account?

Hackers and identity thieves get into your bank account by tricking you into handing over sensitive information, or by using technology to capture your data without your knowledge.

• Phishing: An email, text or phone call that appears to come from your bank, usually asking you to open an attachment, click a link or visit a site that looks real but is designed to collect your personal and financial information or install harmful software on your device.

• Keylogging: Software installed after a successful phishing attack that records your username and password keystrokes as you log in to online banking.

• Man-in-the-middle attack: The thief inserts themselves between your device and your bank's servers to intercept, and sometimes alter, the information you and your bank exchange.

• Credential stuffing: Thieves buy stolen login credentials and automatically test them across many sites, hoping one still works. This is why sites lock you out after too many failed password attempts.

• SIM swapping: Scammers convince your cell carrier to move your phone number to a SIM card they control, giving them access to your one-time text codes and other sensitive information.

• Data breaches: Scammers unlawfully gain access to a company's stored data, which might include your name, address, Social Security number and account numbers.

According to Verizon's 2026 Data Breach Investigations Report, exploiting a software vulnerability overtook stolen credentials as attackers' top entry point for the first time in the report's 19-year history, at 31% of breaches versus 13% for credential abuse as the initial foothold. Credential-based tactics still matter, though. Verizon found stolen or reused credentials play a role somewhere in 39% of breaches once you count the full attack chain, not just the opening move, which is why the defenses below still count.

How Do You Protect Your Bank Account From Identity Theft?

Banks build in a range of security measures, but you also need to take steps on your end. Here's the core checklist:

• Create a different, strong password or passphrase for each account, or better yet, use a passkey where your bank offers one.

• Turn on multi-factor authentication, which requires at least one verification method beyond your password, such as facial recognition, a one-time code or a physical security key.

• Sign up for account alerts that text or email you whenever a login or transaction occurs.

• Review your statements regularly for charges you don't recognize.

• Keep your devices and apps updated with the latest security patches.

• Avoid public Wi-Fi for banking, or use your phone's hotspot or a VPN if you have no other option.

• Learn to spot bank impersonation scams and other common types of financial fraud before they reach your inbox.

How Do You Create Strong Passwords and Passphrases?

If your bank's platform doesn't yet support passkeys, a strong, unique password or passphrase (a string of unrelated words) is your next-best defense. Weak or reused passwords remain one of the easiest ways for thieves to get in, which is part of why security researchers keep pushing the industry toward password-free logins.

Should You Use Multi-Factor Authentication or a Passkey?

Yes. A password or passphrase alone isn't enough to secure a financial account, but not every added layer offers the same level of protection.

MFA and Passkeys, Ranked by Security Strength

• SMS passcodes are better than a password alone, but they're the least secure MFA method since they're vulnerable to SIM swapping.

• Authenticator apps are a stronger version of the same idea. Instead of a text message, you get a code inside an app, which protects it from SIM-swap attacks.

• Security keys and passkeys are the strongest option and the FTC's recommended standard. A thief would need both your login credentials and your physical device or key. If you use a USB security key, remove it promptly after logging in.

Adoption of the strongest option is accelerating. The FIDO Alliance's State of Passkeys 2026 report, based on a survey of 11,000 consumers, found 90% of people are now aware of passkeys and 75% have enabled one on at least one account, though only 49% use them regularly when available. The same report found 33% of consumers experienced a confirmed account compromise or breach notification in the past year, a reminder that awareness alone doesn't close the gap.

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How Do You Spot Phishing and Bank Impersonation Scams?

The FTC warns that impersonators often reach out by text, email or phone with an urgent message about an unauthorized transaction, a problem with a bill payment, an invoice you didn't authorize or an unexpected government payment. Scammers typically include a file attachment or link that can download malicious software or send you to a fake login page that looks like your bank's.

Some warning signs to watch for:

• Anyone asking for your password, one-time passcode or PIN. Your bank will never request this information from you directly.

• An email address that comes from a domain other than your bank's official one.

• A link that goes to a web address that doesn't match your bank's actual domain. Hover over a link without clicking to check it first.

• A landing page with misspellings, awkward grammar or other irregularities.

If you're ever unsure whether a message is real, don't reply or click anything. Instead, review common Zelle scams and other fraud red flags, then call your bank using the number on your card or statement.

Why This Matters More in 2026

Identity theft reporting had been trending down since its pandemic-era peak, then reversed course. FTC data shows reports climbed from about 650,000 in 2019 to a peak of roughly 1.43 million in 2021 (driven largely by pandemic unemployment and stimulus fraud), fell for two straight years, then rose again to 1,135,291 in 2024, the most recent full year with finalized data.

Source: FTC Consumer Sentinel Network 2024 Data Book.

How Do You Monitor Your Accounts and Catch Fraud Early?

You can't always prevent fraud, but early detection limits the damage.

• Opt in to login and transaction alerts and any other notifications your bank offers.

• Switch to online statements. Paper statements sent by mail are vulnerable to mail theft.

• Use credit monitoring, which gives you ongoing access to your credit score and report so you can watch for changes tied to your credit score or new accounts you didn't open.

• Learn the difference between a fraud alert and a credit freeze, since they offer different levels of protection and require different steps to set up.

How Do You Keep Your Devices and Connections Secure?

• Enable automatic software updates so you always have the latest security patches.

• Avoid public Wi-Fi for financial accounts; use your phone's hotspot instead.

• If you must use public Wi-Fi, use a VPN.

• Enable your browser's ad blocker to avoid accidentally clicking a scam ad on a search results page.

• Enable biometric login and a device lock so no one can access your phone or computer if it's lost or stolen.

What Should You Do if Your Bank Account Is Compromised?

Don't wait until the damage is done. Move through these steps as soon as you suspect abreach:

1. Check your credit report at AnnualCreditReport.com for signs someone has used your accounts or opened new ones in your name. Learn what shows up on a credit report if you're not sure what to look for, and check what affects your credit score so you can spot changes that don't match your own activity.

2. Contact each of the three credit bureaus to freeze your credit and sign up for free fraud alerts.

3. Contact your bank using the number on your debit card or statement, or by typing the bank's web address directly into your browser. Never click a link in a suspicious message.

4. Close the compromised account and open a new one.

5. Report the fraud to the FTC at IdentityTheft.gov and file a police report if money or your identity was misused.

From there, transfer over any automated bill payments and savings transfers, set up login and transaction alerts on the new account and consider identity theft protection or credit monitoring if you don't already have it in place. If your compromised account included a joint account, review how joint ownership affects liability if you're not married to the co-owner, since some protections differ from a solo account.

Bottom Line

Protecting your bank account from identity theft comes down to a layered approach: secure your login with the strongest MFA method or passkey your bank supports, watch your accounts and credit report for early warning signs and move quickly if something looks wrong.

No single step stops every attack, but stacking these defenses makes it significantly harder for a thief to get in, and much easier for you to limit the damage if one does get through.

Key Terms

• Phishing: A scam email, text or call impersonating your bank to trick you into revealing login credentials or installing malware.

• SIM swapping: A scam where a thief convinces your cell carrier to transfer your phone number to a new SIM card they control, giving them access to your text-based verification codes.

• Multi-factor authentication (MFA): A login method requiring at least one verification step beyond your password, like a code, biometric scan or physical security key.

• Passkey: A cloud-stored or device-based credential that replaces a traditional password and is highly resistant to phishing and credential theft.

• Credit freeze: A free tool offered by the three credit bureaus that blocks new accounts from being opened in your name until you lift it.

• Credential stuffing: An attack where stolen username-password pairs are automatically tested across many websites to find accounts they also unlock.

• Data breach: An incident where a company's systems are accessed without authorization, potentially exposing customer data like names, account numbers or Social Security numbers.

Summary generated by AI, verified by MoneyLion editors

Sources

• Federal Trade Commission: Consumer Sentinel Network 2024 Data Book

• Federal Trade Commission: New FTC Data Show a Big Jump in Reported Losses to Fraud

• FIDO Alliance: State of Passkeys 2026

• Verizon: 2026 Data Breach Investigations Report

Summary generated by AI, verified by MoneyLion editors

FAQ

Here are quick answers to common questions about protecting your bank account from identity theft:

Can someone steal money from my bank account with just my account number?

Possibly, if they also know the name of your bank, since that makes it easier to find your routing number. The two together could give a thief a path into your account, so treat your account number as sensitive information and avoid sharing it unnecessarily.

Does my bank have to refund money if my account gets hacked?

That depends on the circumstances of the theft and how quickly you report it. Reporting unauthorized transactions or a stolen debit card immediately generally improves your chances of being reimbursed, though outcomes vary by bank and situation.

Is it safe to use mobile banking apps?

Generally, yes, as long as you keep your apps updated and follow good habits like multi-factor authentication, device locks and avoiding public Wi-Fi for banking. Reading up on how safe mobile banking apps really are can help you decide which extra precautions make sense for you.

What's the safest kind of two-factor authentication for banking?

A physical passkey or security key is the safest method, followed by an authenticator app. SMS text codes are better than nothing but are the weakest option since they're vulnerable to SIM swapping.

How can I tell if a text or email from my bank is real?

Use the bank's app already on your device, type the bank's web address directly into your browser, or call the number on your debit card or statement. Ask customer service to confirm the message before responding to it in any way.