Is It Safe to Bank Online?

Last week's security breach at Citibank was just the latest in a string of incidents that have rattled consumers: Sony, Lockheed Martin, and iTunes are also among recent high-profile targets. With such big names falling victim to hackers, is it still safe to bank online? The answer, according to top security experts, is a qualified "yes." Using the Internet to bank, buy music, or shop is still as safe or safer than visiting brick-and-mortar locations, as long as consumers take precautions and know what to do if they notice any suspicious activity.


As long as consumers take a few basic steps (explained below) to help protect their information, security experts agree that online banking remains safe. That's a good thing, since it's almost impossible for consumers to avoid sharing personal data online if they want to participate in 21st-century life, from Facebook to online sales to paying bills.

1. Don't talk to cyber-strangers, and don't click on hyperlinks within emails from strangers. "That's the easiest way to download malware to your computer," says McNelley.


2. Treat your smartphone like the computer it is. Downloaded apps can contain malicious codes, warns McNelley. "You have no idea who created that app, and very little code-checking goes on," she says. If you're going to download apps, she suggests avoiding or minimizing the financial transactions you make with the smartphone.


3. Treat social networks like dark street corners. You never know who's lurking among your friends and acquaintances. Hackers have targeted Gmail, Facebook, and LinkedIn, and users of those sites should be especially wary of clicking on embedded links, even those "recommended" by friends.


4. Use the Net to your own advantage. If you bank online, you don't have to wait until the end of the month to check your statement. You can log in anytime and make sure nothing is amiss.

5. Get free help. Many credit card issuers offer free and automatic identify-theft protection to customers.

6. Think of a new word. Keep careful track of your passwords in a secure document, rely on mnemonic devices to boost your memory, or come up with some other clever strategy--but don't stick with simple passwords that are easy for strangers to guess. Also, change your passwords on a regular basis.

7. Never, ever give your Social Security number to anyone online. If a site asks for it during the checkout process, it's probably a scam site.

8. Shred or safely store financial mail. Bank statements, investment documents, and other financial paperwork can give thieves clues about account numbers, Social Security numbers, and other personal information.

9. Fight back quickly. If you are hacked, step one is calling your bank, says McNelley. That's because banks have sophisticated systems in place that can immediately begin closely monitoring your account for signs of identity theft. They can also and shut down and replace any accounts if necessary. In fact, banks are often the first to notice something amiss, even before the victim.

10. Trust your gut. "You often hear, after consumers used an ATM with a skimming device, they had a bad feeling about it. If you do have that feeling, listen to it," says McNelley, and remove yourself from the situation.