Online Banking: Are You Ready?

Taking the leap is as easy as point, click, and save

does for them to produce online account pages. And, according to Pew Internet study findings, customers who bank online make fewer customer service calls and are less likely to switch banks.

One of the banking industry’s biggest pushes is allaying their customers’ apprehensions about online banking and reminding them that the service exists. Websites for all major banks, from Bank of America to Citibank, invite customers to register their accounts online and be guided through screens that lay out the security features of their sites. Michael L. Jackson, associate director in the division of supervision and consumer protection for the Federal Deposit Insurance Corp., says online banking is generally safe. He recommends looking for a secure Internet page, denoted by a padlock located at the bottom, right corner of your screen; installing an up-to-date virus protection program; and refusing to respond to suspicious e-mails that appear to be from your financial institution without calling to confirm their validity first.

The FDIC cautions consumers to be on the lookout for phishing scams–when identity thieves send out fake e-mails intended to look like solicitations from a bank or government agency requesting personal or financial information such as your Social Security number (see “Don’t Go Phish,” Shopsmart, this issue). The e-mails usually direct the consumer to a fraudulent Website in an attempt to steal their identity. “A lot of people are apprehensive about banking online, but if you know how, it is safe,” says Jackson.

In fact, a recent study commissioned by the Better Business Bureau and conducted by Javelin
Strategy & Research this year, found that fears of identity theft are largely unfounded. Family members, friends, and neighbors make up half of all identity thieves. And lost wallets, checkbooks, and stolen mail far outweigh hackers and spyware when it comes to identity theft. “Identity theft is still primarily an off-line crime,” says Jordana Beebe, communications director for the Privacy Rights Clearinghouse, a nonprofit consumer advocacy group based in San Diego. “In general, online banking tends to be a little bit safer because there isn’t a paper trail. A lot of identity theft is the result of stolen mail, and online banking reduces the chance that your personal financial information can be stolen that way. Online bankers also tend to check their accounts more frequently, so any unauthorized activity would be caught sooner [than if you had to wait for a monthly bank statement.]”

Jennifer Goodwin Lyles, 36, has become adept at spotting phishing e-mails. A seminary student who lives in Pasadena, California, she used to receive them regularly from scammers pretending to be her old bank. The e-mails asked her to click on a link and enter her bank account information and account password. “There was something in the font that looked amateur,” she says. “It was as if you had a fake dollar bill. You can kind of tell it’s not the same quality.”

Goodwin Lyles also knew that most of the correspondence she received from her bank was via mail. She immediately called her bank,

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