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How Safe is Personal Online Banking?

by chiron99

As the use of the Internet continues to expand, more banks and
thrifts are using the convenience and ease of the Web to offer
products and services, as well as enhance communication with
customers. According to the Federal Deposit Insurance Corporation
(FDIC), the Internet offers the potential for safe, convenient
ways to shop for financial services and conduct banking business
- 24/7. However, to ensure safe banking, customers need to be
educated in making good decisions that protect them from costly
surprises or even scams.

Protecting Deposits

Whether seeking a traditional bank or online bank that has no
physical offices, the FDIC advises to make sure that the
institution is legitimate and that deposits are federally
insured.

The following are safety guidelines for those considering
Internet banking:

1. Seek key information about the bank posted on its Web site.
Read the "About Us" section that describes the institution where
a brief history of the bank, the official name and address of the
bank's headquarters, and information about its insurance coverage
is provided.

2. Be on the watch for fraudulent Web sites. Keep an eye out for
copycat Web sites that use a name or Web address very similar to
that of a real financial institution. These sites hope to lure in
unsuspecting customers who might provide personal information,
such as an account number and password.

3. Verify the bank's insurance status. Customers should look for
the familiar FDIC logo or the words "Member FDIC" or "FDIC
Insured" on the Web site. Some banks operating on the Internet
are not insured by the FDIC, such as those chartered overseas.
Customers who choose to bank with these types of banks should
know that the FDIC may not insure deposits.

4. For insurance purposes, banks may use different names for
online and traditional services. This however, does not mean
customers are dealing with separate banks. To determine maximum
FDIC coverage, deposits at the parent bank are added together
with those at the separately named bank Web site and are insured
for up to the maximum amount covered for one bank.

5. Only deposits offered by FDIC-insured institutions are
protected by the FDIC. Products such as mutual funds, stocks,
annuities, and life insurance policies sold through Web sites or
at the bank itself, are not FDIC-insured, are not guaranteed by
the bank, and may lose value.

Protecting Privacy

Bank customers often want to know how their personal information
is used by their bank and whether it is shared with affiliates of
the bank or other parties. As of July 2001, banks are required to
provide customers with a copy of their privacy policy, regardless
if business is conducted online or offline.

Customers should be advised that banks may want to share
information about their customers to help market products
specific to needs and interests. Customers who do not wish to
participate in information sharing have the right to prevent the
bank from sharing personal information with any parties not
affiliated with the bank.

Some companies may also track the Web browsing habits of their
customers while at the bank's site, to better understand
interests. Customers can ask whether a specific bank track
browsing habits if these practices pose a concern.

Protecting Transactions

Learning how to safeguard banking information, credit card
numbers, Social Security Number, and other personal data is of
vital importance when conducting business on the Internet.

Customers who want to ensure their transactions are secure
should carefully examine a bank's Web site for information about
its security practices, or contact the bank directly. Examples of
security features include:

1. Encryption: the process of scrambling private information to
prevent unauthorized access. Some browsers display a small icon
on the screen that looks like a "lock" or "key" when customers
conduct secure transactions online.

2. Passwords or PINs: When customers access an account online, a
password or personal identification number (PIN) should be
required. Passwords or PINs should be unique and changed
regularly. Avoid birthdates or numbers or words easily guessed by
others.

3. General security: Virus protection over personal computers
and physical access controls should be used and updated
regularly.

<a
href="http://www.AmericanMomentumBank.com">AmericanMomentumBank.com</a>
provides a wide array of personal banking and business banking
options and banking solutions tailored to your individual needs.
For more information, please visit <a
href="http://www.americanmomentumbank.com">AmericanMomentumBank.com</a>.

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