When it comes to online banking, there is no way to absolutely guarantee your safety. However, good practices do exist that can reduce the risks posed to your online accounts. The following sections describe these practices.
By law, banks are required to send you a copy of their privacy policies and practices annually; you may also request a copy of this information. Bank web sites should also have this information. As you read this information, pay particular attention to any mention of the methods used for encrypting transactions and authenticating user information. Also, check the information to see if the bank requires additional security information before authorizing a payment to a business or individual that has never received a payment before.
You have the right to limit the information an online bank shares with both its parent organization and any other financial institutions (see “Protecting Your Privacy” and “How Anonymous Are You?” for more information). Be aware that some online banks may have separate procedures for handling each of these requests. You may also want to use a service such as the Better Business Bureau to view any existing history of outstanding consumer complaints about privacy violations.
Be sure to change your PIN regularly. Do not choose a PIN that contains personal information such as your birthday or Social Security number; an attacker might be able to guess these. Regardless of the circumstances, never give someone access to your current PIN number.
Installing and updating this software protects your computer and its contents against unauthorized access. You should turn on automatic updates for these programs or, if prompted, always agree to download system updates as soon as they are available.
Timing is a factor in your response to unauthorized electronic fund transactions. If you receive a paper account balance, make sure that you reconcile it with your online balance.
Credit cards usually have stronger protection against personal liability claims than debit cards. Some credit cards limit personal liability for unauthorized transactions to $50. Personal liability for debit cards can be higher. According to the Federal Reserve’s Regulation E, if you report an electronic fund transaction problem involving debit cards to a bank or financial institution in the first two days, you are only liable for $50. Reporting that same incident between 3 and 60 days increases your personal liability to $500. After 60 days, there are no financial restrictions placed on your personal liability.
You should conduct online bank transactions in locations that are not subject to public monitoring. When you are entering login information, you should avoid using unsecured or public network connections (for example, at a coffee shop or library). As a general rule, you should avoid using any computer that other people can freely access; the end result could be unauthorized access of your financial information. Remember, it is possible for your account information to be stored in the web browser’s temporary memory.
You should not reply to any email requests for security information, warnings of an account suspension, opportunities to make easy money, overseas requests for financial assistance, and so forth. Also, links found in these suspicious emails should not be clicked. To have the suspicious email investigation, forward a copy of it to the Federal Trade Commission at [email protected] and then delete it from your mailbox.
Online banking involves certain risks. It is important to educate yourself about these risks, how unauthorized access to your financial information occurs, and the steps you can take to protect your financial information. Learning about your rights and responsibilities as an online banking consumer can make a difference to your financial well-being by changing the age-old saying “A penny saved is a penny earned” to “A penny saved is a penny kept.”