FEATURE ARTICLE: Banking over the Internet
The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business, any day, any time. However, safe banking online involves making good choices –decisions that will help you avoid costly surprises or even scams.
If you are thinking about or already using online banking systems then the information provided below will help you.
• Confirm that an online bank is legitimate and that your deposits are insured.
Whether you are selecting a traditional bank or an online bank that has no physical offices, it is wise to make sure that it is legitimate and that your deposits are federally insured. Here are tips specifically designed for consumers considering banking over the Internet.
• Read key information about the bank posted on its Web site.
Most bank Web sites have an “About Us” section or something similar that describes the institution. You may find a brief history of the bank, the official name and address of the bank’s headquarters, and information about its insurance coverage from the FDIC.
• Protect yourself from fraudulent Web sites.
For example, watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.
• Verify the bank’s insurance status.
To verify a bank’s insurance status, look for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. Also, you should check the FDIC’s online database of
FDIC-insured institutions. You can search for an institution by going to the FDIC’s home page at
www.fdic.gov and selecting “Is My Bank Insured?” Enter the official name, city, and state of the bank, and click the “Find My Institution” button. A positive match will display the official name of the bank, the date it became insured, its insurance certificate number, the main office location for the bank, and its primary government regulator. If your bank does not appear on this list, contact the FDIC. Some bank Web sites provide links directly to the FDIC’s Web site to assist you in identifying or verifying the FDIC insurance protection of their deposits. Also remember that not all banks operating on the Internet are insured by the FDIC. Many banks that are not FDIC-insured are chartered overseas. If you choose to use a bank chartered overseas, it is important for you to know that the FDIC may not insure your deposits. Check with your bank or the FDIC if you are not certain
• Know where to get more information about FDIC insurance.
Don’t worry about your deposit insurance coverage if you or your families have less than $100,000 in all your accounts combined at the same FDIC-insured bank. But if your accounts total $100,000 or more, find out if they’re within the insurance limit. Contact your bank for more information. For additional assistance from the FDIC about the legitimacy of an institution or the insurance of your deposits, call the FDIC’s Division of Compliance and Consumer Affairs toll-free at 800-934-3342 or send an e-mail via the FDIC’s online Customer Assistance page at www.fdic.gov/consumers/questions/customer/index.html.
It is important to note that only deposits offered by FDIC-insured institutions are protected by the FDIC. Non deposit investment and insurance products, such as mutual funds, stocks, annuities and life insurance policies that may be sold through Web sites or at the bank itself, are not FDIC-insured, are not guaranteed by the bank, and may lose value.
• Keep your personal information private and secure;
Some consumers may 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. Starting July 2001, banks are required to give you a copy of their privacy policy once you become their customer, regardless of whether you are conducting business online or offline. You may also see a copy of it posted at the bank’s Web site. By reviewing this policy you can learn what information the bank keeps about you, and what information, if any, it shares with other companies. Banks may want to share information about you to help market products specific to your needs and interests. If you do not wish to participate in information sharing, however, you have the right to prevent your bank from sharing your private personal information with parties not affiliated with the bank, except in certain limited circumstances. Your bank should provide a clear method for you to “opt out” of this type of information sharing. You may have heard that some companies track your Web browsing habits while at their site, to understand your interests and then to market particular services or promotions. You may want to ask whether your bank tracks your browsing habits if these practices concern you. Also, your Web browser may enable you to block the ability of outside companies to track your browsing habits. Your bank and your Internet service provider may have more information about how to protect your privacy online.
Help Keep Your Transactions Secure
The Internet is a public network. Therefore, it is important to learn how to safeguard your banking information, credit card numbers, Social Security Number and other personal data.
• Look at your bank’s Web site for information about its security practices, or contact the bank directly.
Also learn about and take advantage of security features. Some examples are:
• Encryption is the process of scrambling private information to prevent unauthorized access. To show that your transmission is encrypted, some browsers display a small icon on your screen that looks like a “lock” or a “key” whenever you conduct secure transactions online. Avoid sending sensitive information, such as account numbers, through unsecured e-mail.
• Passwords or personal identification numbers
(PINs) should be used when accessing an account online. Your password should be unique to you and you should change it regularly. Do not use birthdates or other numbers or words that may be easy for others to guess. Be careful who you give your password to. For example, if you use a financial company that requires your passwords in order to gather your financial data from various sources, make sure you learn about the company’s privacy and security practices.
• General security over your personal computer such as virus protection and physical access controls should be used and updated regularly. Contact your hardware and software suppliers or Internet service
For More Help
Answers to your questions.
Many regulations provide consumer protection for both traditional and online transactions. If you have any questions or concerns, first try to get answers from your bank. If you are still not satisfied, contact the appropriate federal regulator. For a brief overview of the regulations, log on to the FDIC’s Consumer Rights Web pages at www.fdic.gov/consumers/consumer/rights/index.html. If you would like to review the regulations, you can look them up at www.federalreserve.gov/regulations/.
Where to file a complaint.
If you know your bank’s primary regulator, you may file your complaint online or via e-mail using one of the following methods. If you are not certain where to file your complaint, you may contact any of the agencies listed below and they will direct you to the appropriate office.
Federal Deposit Insurance Corporation:
www.federalreserve.gov/pubs/complaints
Where to report a suspected fraud.
Contact the FDIC at www.fdic.gov/bank/individual/online/spcious.html if you have been a victim of banking fraud, or if you have visited a bank Web site that appears to be fraudulent.
For More Information
For more information about online banking in general, write or call the following banking regulators or visit their Web sites:
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
(800) 934-3342
www.fdic.gov
Board of Governors of the Federal Reserve System
20th and Constitution Avenue, NW
Washington, DC 20551
(202) 452-3693
www.federalreserve.gov
Office of the Comptroller of the Currency
Customer Assistance Center
1301 McKinney Street, Suite 3725
Houston, Texas 77010-3031
(800) 613-6743
MONEY SAVING TIP: Gifts
- Make your own greeting cards.
- Make your own wrapping paper.
- Offer to give a service, like a night of free babysitting as a gift, instead of buying stuff.
- Give baked goods. Everyone loves cookies!
Learn the art of the re-gift. If you get something that you don’t like, keep it and give it to someone else later. However be careful to keep track of who gave you what. You don’t want to give a gift back to somebody.
DID YOU KNOW…that on February 22, 2010 the Credit Card Accountability Responsibility Disclosure Act of 2009 will go into effect?
What does this mean? Before you apply for a new credit card, you may want to wait until after this date because accounts will be simpler to manage and carry fewer whammies from the card issuer.
What you can expect with this CARD Act:
- No increase of interest rates on existing balances unless the consumer is at least 60 days late.
- The card issuer will have to provide clear disclosure of terms before the consumer opens an account. This means letting the consumer know if they are signing up with an introductory rate and that these rates must last at least six months.
- The consumer will have 21 calendar days from the day a card statement is printed to pay the bill.
- If the consumer makes a payment that is more than the minimum requested, the excess will be applied to the highest interest balance first.
- No over the limit fees without the consumer’s consent.
- No charges for payments made by phone, mail or electronic transfers.
- The elimination of double-cycle billing. This is the practice of basing finance charges on the consumer’s current and previous balances. This prohibits the issuer from charging interest on the debt paid the previous month.
- The end of universal default practices. Here the issuer could raise the consumer’s interest rates for being late with payments to other creditors while staying current on their account.
- The issuer will have to provide an estimate of how long it will take to pay off a balance at the minimum payment rate. If this amount of time is too long for the consumer, the issuer will also have to provide a number to a nonprofit credit counseling agency to assist the consumer in paying off the debt faster.
