| Online Banking Scam Prevention |
| By Credit Federal |
Published
01/29/2009
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Financial Tips
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Top Tips for Online Banking Scam Prevention
Just like banks have vaults to securely store money, online financial institutions also have security measures. But, just as a robber can walk into a bank, so too can hackers break through online security measures.
So should you be avoiding online banking altogether? There are risks associated with traditional banking as well. In fact, over 3/4 of banking fraud stems from offline factors, such as check fraud, mail theft or a lost wallet.
With online banking there are indeed some unique high risks. For example, a virus; obtained by visiting an infected website, downloading software or music that has a virus or by other means, can infect your computer and enable a hacker to steal your bank account usernames and passwords.
Online banking has become one of the fastest growing internet activities. According to a 2006 survey by the Pew Internet & American Life Project, about 63 million Americans do some form of online banking.
Some banks have spent millions adding more layers of authentication, toughening encryption schemes and going after and shutting down bogus bank sites. Yet that hasn't entirely stopped hackers, who aggressively seek ways to exploit security gaps.
Most popular scam attack: Phishing schemes that duplicate bank Web sites urge customers to login to their accounts or to otherwise provide their financial information. Usually these two scams go together. The scammer will send the victim an email containing a link that directs recipients to a bogus bank site. Even if the web address looks legit, there's a way for scammers to conceal the actual web address. The scammer hopes the victim will respond to the email, click on the bogus website link and then input their usernames and passwords into a form hosted on the bogus website. Instead of logging you into your account, the scammer ends up getting your login information.
Other cyber-robbers embed viruses, spyware or "Trojan horses" (programs that can give thieves unauthorized access to a computer by recording and sending out a user's keystrokes). These programs allow thieves to look over your virtual shoulder as you type in sensitive financial information. Within seconds, your savings and checking accounts, even your investments, could disappear.
The so-called Sinowal Trojan, a virus that injects what seem like legitimate pages on someone's browser, steals the user's log-in credentials. In probably one of the largest online banking breaches known to date, the virus has compromised 300,000 online bank accounts and about 250,000 credit and debit card accounts over the past three years, according to a study published in October by California's RSA FraudAction Research Lab -- with more than 100,000 online bank accounts hit in the past six months alone.
Banks are fighting back... For a small fee, Bank of America offers the SafePass card, a wallet sized card embedded with a button that; when pressed, sends the customer a six digit security code via text message. The customer can then enter the code along with his/her user name and password to access an online account. For business accounts or wealthier clients, some banks also offer SecurID, a token-like device that generates a new six-digit code every minute that users need to log in to their accounts. Bank of America, along with other financial institutions, also has started an alert system advising customers by email or text every time a transaction occurs.
When you're online, even though you have a lot of risks, you're more in control because you can do something about the risk -- you can monitor your accounts, and you can say no to the malicious junk. With traditional banking, you can't do much to keep prying eyes from looking at paper checks and paper statements.
Top 10 tips on how to prevent being an online banking scam victim:
1. Before you login to a bank web site, make sure you manually type in the web address exactly as it was provided to you by your bank. Typically they'll provide you with e secure web address which begin with "https://" (not "http://", without an 's'). Make sure the bank's padlock is displayed in a corner of the site before you log on.
2. Login only from a secure, not publicly-shared computer. Never login from a public computer such as one provided by a library, a hotel or cafe.
3 Avoid logging in via free internet WiFi hot-spots.
4. If you receive an email regarding your bank account, call your bank. DON'T click on any links in the email.
5. If your computer is acting strangely (running slowly or lauching popups), avoid using it for online banking until you can get it checked out.
6. Keep anti-virus and anti-spyware software up to date.
7. Install and maintain a firewall.
8. Never respond to any email that requests personal information.
9. Be leery of fly-by-night, Internet-only banks with high interest rates on savings or checking accounts. Make sure the bank is FDIC-certified and is insured.
10. Use a different username and password for each financial account. The password should be complex, with numbers and symbols, and changed regularly.
Apply for an online bank checking account.
Free Checkbook Register Software to track expenses.
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