Today’s busy, sometimes dangerous world means that many of us are attracted to the ease and security of online banking.

Doing our banking in cyberspace means we can avoid queues, the frustration of traveling to and from home with our cash and have the added knowledge of knowing we are safely tucked away in our living rooms as we distribute our hard earned funds. But did you know that using the internet for our banking purposes can also expose us to a new breed of criminals?

Even though you might think you know how to safely use online banking, these crooks are often a step ahead so it pays to keep yourself informed about the latest threats. Sadly, when the world at large moved to online banking, so did many unscrupulous individuals ready, willing and able to cyber-mug us. These handy tips on how to safely use online banking will leave you well-armed against potential cash-jackers.

Tips for Safe Internet Banking

Safer internet banking essentially means making better decisions. The kinds of choices you make when banking or shopping for financial services can mean the difference between ease of use and being scammed. There are four main things you need to know to safely use online banking services:

#1. How to confirm that an online bank is legitimate and that your deposits are insured.

#2. How to keep your personal information private and secure.

#3. How to determine your rights as a consumer.

#4. Where to go for more assistance from banking regulators.

1. Is your Online Bank Legitimate?

Traditional banks usually have physical addresses but many of today’s online banks are online service providers only so it’s a good idea to make sure they are ‘real’ banks and that your deposits are federally insured. If not you could be scammed into handing you money over to criminals. Make sure by doing the following:

* Read key information about the online bank posted on its Web site.

To safely use online banking, read the banks ‘About Us’ page. Here the bank should provide information about its policies and ethics as well as its time in operation and history. The page should also contain the bank’s official name and address of its headquarters. Information pertaining to its insurance coverage from the Federal Deposit Insurance Corporation (FDIC) should also be listed.

* Protect yourself from fraudulent Web sites.

In particular, watch out for ‘copycat’ web sites that use names and addresses that are very similar to but not identical to that of the legitimate bank. These site addresses are intended to persuade to click on their site instead and offer up personal information like your account number and password. When you visit your online bank always make sure that you have typed the correct site address before doing anything on the site.

* Verify the online bank’s insurance status.

To safely use online banking, verify a bank’s insurance status by looking for the familiar FDIC logo or the words “Member FDIC” or “FDIC Insured” on the Web site. You may also want to check the FDIC’s online database to see if the bank is registered.

Simply enter the name, address and state in which the bank is located and if it is found its official name and date it became insured should be displayed. Its insurance certificate number and main office location should also be available as well as its main government regulator. If your chosen bank does not feature on the list contact the FDIC.

* Be aware that a bank may use different names for its online and traditional services (this does not mean you are dealing with separate banks).

This is important for insurance purposes. As an example, to determine your maximum FDIC insurance coverage, your deposits at the parent bank will be added to those at the separately named bank Web site. You will be insured for up to the maximum amount covered for only one bank. Ask your banker for more information on how to safely use online banking.

* Know where to get more information about FDIC insurance.

If you or your family have less than $100,000 in your combined accounts at the same FDIC-insured bank don’t worry about insurance. However, if your accounts add up to $100,000 or more you need to establish whether they are within the insurance limit. Your bank will be able to provide this information.

More Online Banking Information

If you want to find out more about the legitimacy of an institution or your insurance call the FDIC’s Division of Compliance and Consumer Affairs at 800-934-3342 (toll-free). You can also e-mail them via the FDIC’s online Customer Assistance page.

The FDIC Web site also has an interactive service called EDIE (Electronic Deposit Insurance Estimator). This can be used to establish the amount of your insurance coverage. Or, you can read the Insurance Brochure ‘Your Insured Deposits’ for more information on how to safely use online banking insurance checks.

2. Keeping your Personal Information Safe

You will want to know how the information you share with your online bank is used and whether it will be shared with affiliates.

As from July 2001 banks MUST give you a copy of their Privacy Policy when you register as a client. This applies whether you use online or offline services. A good web site may provide a copy online.

The banks privacy policy should detail what personal information is kept by the bank and what is shared with other parties. Shared information is usually that which pertains to marketing the banks services or those of their affiliates but if you object to this usage of your personal information you have a right to restrict it. Your bank must provide you with details of how you can opt out in order to safely use online banking.

You may want to ask your bank if they adopt any web tracking procedure for marketing purposes and if they do block them using your web browser security settings.

* Transactions

The internet is a public domain so you need to make sure your transaction information, credit card numbers, Social Security Numbers etc. are kept safe. Do this by:

* Encryption

This is where private information is scrambled to stop unauthorized access. Some browsers will display a small icon on your screen that looks like a “lock” or a “key” to indicate that it is a secure transaction. Never send any sensitive information, such as account numbers, through unsecured e-mail.

* Passwords or personal identification numbers (PINs)

Secure passwords should be used when accessing your online account. They are one of the most important ways you can safely use online banking. Make sure this is unique and change it often. Don’t use your birth date or numbers or words that may be easy to guess. Never share your password with anybody.

* General security

Virus protection and physical access controls should be used and updated often. Make contact with both your hardware and software suppliers or your Internet service provider and ensure you are up-to-date. These tools are essential to safely use online banking.

3. Consumer Rights

Consumer protection is provided for both traditional and online transactions. First ask your bank to provide answers. If you aren’t satisfied contact the appropriate federal regulator. A brief overview of the regulations is provided on the FDIC’s Consumer Rights Web page. To review the regulations, visit:

http://www.federalreserve.gov/regulations.

4. Where to Go For Help on How to Safely Use Online Banking

To file a complaint: If you know your bank’s primary regulator, file a complaint online or via e-mail. If you don’t know where to file your complaint, may contact one of the agencies listed below and they will direct you. These organizations also know all the tricks involved to safely use online banking and have a wealth of information at their fingertips.

Consumer Pages

Federal Deposit Insurance Corporation:

http://www2.fdic.gov/starsmail

Office of the Controller of the Currency (e-mail): customer.assistance@occ.treas.gov.

Board of Governors of the Federal Reserve System:

http://www.federalreserve.gov/pubs/complaints

Office of Thrift Supervision (e-mail):

consumer.complaint@ots.treas.gov

General Information

Federal Deposit Insurance Corporation 550 17thStreet, NW Washington, DC 20429 (877) 275-3342 or (877) ASK-FDIC

For the hearing impaired (800) 925-4618 or (202) 942-3147 for calling from the Washington, D.C. area

http://www.fdic.gov

Board of Governors of the Federal Reserve System 20th and Constitution Avenue, NW Washington, DC 20551 (202) 452-3693

http://www.federalreserve.gov

Office of the Comptroller of the Currency Customer Assistance Group 1301 McKinney Street, Suite 3710 Houston, Texas 77010-3031 (800) 613-6743

http://www.occ.treas.gov

Office of Thrift Supervision 1700 G Street, NW Washington, DC 20552 (202) 906-6237 (800) 842-6929

http://www.ots.treas.gov