Online Banking Scams to Avoid

Online Banking Scams to Avoid

Online banking seems to be the financial solution of the future. It simplifies people’s lives and grants easier access to account information. With it’s growing popularity, virtually every major bank is now offering online solutions. However, before you commit to uses the web to conduct your finances, be sure you’re aware of the problems that could arise.

E-mail phishing is a major way that criminals have used the online banking phenomena for personal gain. These e-mails look like official communication from a bank. They may even use trademarked logos and insignia. However, the content of the e-mail asks you to submit login information or other personal data in your reply. Real banks will never ask for such sensitive information to be sent via e-mail. Unfortunately, many people fail to realize this and more than two million people fall victim to phishing scams each year. Once your information falls into the wrong hands, it can be used to hack into your account and make transactions that cost you money. Sometimes, this information is even enough to steal a person’s identity.

In addition to being aware of false e-mails, you should never conduct your online banking where someone can see your information over your shoulder. This seems simple enough, but you may not realize someone is watching. So, try not to bank in a public place like a library or internet café. All it takes is a brief glance and someone could steal your banking password or account information.

The most aggressive type of fraud occurs when your identifying information is stolen using hidden software. This is known as a “trojan” program. Such software becomes embedded in a user’s computer without making its presence known. Trojans usually come with attachments downloaded from an unsolicited e-mail or through a less than trustworthy website. Once on your system, they can record information you type into online banking sites, like your username and password, and transmit this data to the trojan’s distributor. Thus, the integrity of your account can be compromised.

Banks are working hard to ensure fraud risk is minimized. One creative new method is to provide customers with a “smart card.” These function as a second form of identification, in addition to a username and password. The card needs to be inserted into your computer before you can begin an online transaction. So, if someone steals your password, they still can’t get access to your money without your card. The reverse is also true, if your card is lost, no one can access your account without your password.

If you do fall victim to online banking fraud, it is important to know your rights. In most cases, you should be able to recover any money that was lost. The key is to notify your bank as soon as you realize there has been a problem. The best way to do this is you call immediately and follow up with a certified letter. Once you make a claim of fraud, the bank is required to investigate. Be sure to have accurate account records available in case they are necessary for this inquiry.

Ultimately, the problems associated with online banking should not deter users from participating in this system. As long as your bank uses a secure network, and you are careful about your internet activities, you should be safe from harm. Furthermore, there are ways to resolve problems should the worst-case scenario occur. In the near future, online banking frauds should be all but eliminated and all consumers will be able to bank safely from the comfort of their own home.