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Many consumers are concerned about the potential security risks of online banking, but banks understand the risks and have taken a range of steps to protect their customers against fraud, identity theft or other concerns.
While consumers face greater risk from traditional offline schemes such as check fraud or credit card theft, banks want their customers to enjoy the convenience of online banking, and understand the need to help protect the security and privacy of online transactions.
Banks generally offer state-of-the-art data encryption and require at least two layers of authentication as users log on. For example, most banks require users to create strong passwords that don't use easily guessed combinations such as "password," "123456," or other common words. Security researchers suggest combining upper and lowercase letters and numbers to create uncommon words that can defeat casual guessing attempts.
In addition, most banks display customer-selected images or phrases to reassure users they are logging on to the bank's legitimate Web site, and a not a careful duplication created by hackers or criminals.
The idea is that the combination of your password and images or phrases you've selected provide reassurances you're logging onto the proper site and that your information and transaction will be protected.
To protect customer data, legitimate banks won't send customers email asking them to verify their log-in data and passwords. The instances of "phishing attacks" in which criminals send phony e-mails masquerading as being sent from banks has fallen in the past couple of years, but consumers should still be careful about the threat.
If you get an e-mail purporting to be from your bank asking you to log in, delete it. If you want to double-check your account, log on directly from your bank's Web site or call the toll free number on your bank statements or the back of your credit card.
Once you've logged on, it's important to look at the site's Web address (a secure address will start with "https" and will be followed immediate by the banks' name) and to check your browser for a closed padlock icon. Both are clues that you've established a secure connection to your bank.
Many banks have started sending customers e-mail message to confirm routine transactions. If you get a note about a transaction you don't remember making, it's a good idea to log on and review recent activity within your accounts.
If you're traveling, don't log onto your online banking account at a public computer, such as in a hotel business center, library or Internet café. Public computers are frequently targeted by hackers who install software designed to capture user log-ins and passwords, so the risk of having your account compromised is much higher.
If you have to conduct a transaction on the road, consider using your mobile phone's Web browser or call the bank instead.
Update Your Software
Another important consideration in protecting your online banking transactions is making sure your PC's operating system, security software and Web browser are up to date. Hackers and criminals routinely try to distribute malicious programs known as keyloggers that secretly record the strokes as people type on computer keyboards and send out user identities and passwords.
Software providers routinely issue updates to protect users against emerging security vulnerabilities or fraud attempts, so it's important to make sure this electronic line of defense is kept current.
While online banking has a few risks, understanding the threats and addressing them carefully can reduce of the risk of having your account and personal data compromised, while still allowing you to enjoy the convenience and savings available from online banking.