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Online Banking: Protecting Your Personal Information and Your Money

September 29, 2010

By: Jim Oosterman, Vice President
Melrose Bank

Everyday the Internet is becoming more and more prominent in everyone's lives. As a result, most banks and financial institutions are offering online banking, bill pay and eStatements. According to a 2009 survey by the Pew Internet & American Life Project, roughly 43% of people who use the Internet, or about 63 million Americans, participate in online banking. And why wouldn't they? Online banking provides less waste, less clutter and less hassle.

But is it safe?

For the most part, these services are a safe and effective way for you to check balances and authorize various transactions at your convenience. Financial institutions go to great lengths to ensure a secure banking environment over the Internet. The industry has established a number of safeguards that help customer information stay secure. Multiple passwords, key codes, and secure locking technology encrypt information and keep it out of the wrong hands.

However, this does not mean you should let your guard down. Customers play an important role in making sure that their internet banking is safe and should follow these tips to protect themselves online:

Make Sure your Bank is Legitimate – Several banks these days are entirely online and don't have the traditional brick and mortar building that we're used to. While many of these banks are legitimate, there are things you should look for when deciding if it's the real thing or a scam. First, get as much information about the bank as possible. Check out the bank's history and look up reviews of the bank on other websites. MyBankTracker.com is a great resource for this. Make sure you know other people's experience with the bank before handing over your personal information.

Be Wary of Copycats – A common online banking scam involves copycat websites that use the name and a similar web address of a legitimate bank. These websites prey on people who misspell a web address. They can then trick you into giving an account number and a password. Always make sure you've typed in the correct address before making a transaction. And always make sure the web address starts with https, this means the website is secure. Another helpful tip is to bookmark your bank's page so you never have to worry about copycats.

Don't Fall For Phishing or Pharming Scams – Phishing is when a hacker or thief sends you an e-mail or calls and asks for your personal information. Pharming is a more complicated and subtle scam that secretly redirects internet users from a legitimate website to a counterfeit one. These attacks, which often appear legitimate, have become more frequent. Fortunately, you can combat these scams by protecting the confidentiality of your account and Personal Identification Number (PIN). Also remember, a legitimate financial institution will never ask you to share important personal information via e-mail or over the phone. If someone stating they are from your bank ever calls you and asks for your information, hang-up and call the bank back at their toll-free number to ensure you are speaking to an actual bank employee.

Look at the Bank's FDIC Status – Check the FDIC's online database of FDIC insured institutions. Simply search for the bank on the www.fdic.gov website. If it doesn't show up, you might want to think twice about the online bank.

Make Your Account Tough to Crack – Make sure your password contains numbers, letters (upper and lower-case), punctuation marks or spaces. Identity theft can come from people who know the victim. Make sure your password is impossible to guess and change it every few months to ensure security. Also make sure you never log onto your account at a public computer. It is also important to keep your anti-virus software up to date.

Know the Online Security of Your Bank – With the constant evolution of phishing attacks and scams, most banks are doing all they can do to prevent theft and fraud. But not all bank security plans are created equal. Talk to your bank about the precautions they've taken to protect your accounts. Question their knowledge on the types of scams you might encounter. If they seem unprepared, it may not be the bank for you.

Online banking is the future; it is important to become familiar and comfortable with the technology to protect yourself and your assets. Most financial websites are secure, but it is still important to be vigilant. If you keep your eyes open and have a bank that cares about your security as much as you do, then you can enjoy all the perks of online banking without any of the anxiety.

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at melrosebank.com or on Facebook at facebook.com/MelroseBank.


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