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Is Online & Mobile Banking Safe?

Chances are, if you weren’t already banking online or through your mobile device before 2020, you are now. For many people, the global pandemic turned remote banking from a nice-to-have feature into a must-have service. Unfortunately, criminals have been quick to cash in on the rapid adoption of online and mobile banking services. Online fraud and identity theft have been spiking as more and more consumers have turned to remote and mobile banking services. Here we take a look at the critical features that help make online banking safe, and what you should look for when choosing a financial institution for your financial home.  We also list some best practices you can adopt to protect yourself from online fraud, how to avoid identity theft, and the steps you should take if you believe your financial account may have been compromised.  Is online banking safe? Yes, if you choose a financial institution that takes security seriously. Read on to learn more about starting out right and staying safe when using online and mobile banking services.

Online & Mobile Banking: How to Stay Safe 

Data collected by the Federal Trade Commission (FTC) shows that consumers reported losing nearly $9 billion to fraudsters in 2022, up more than 30% from 2021. And, this number is likely only a fraction of the amounts lost in crimes not reported to the FTC. Nevertheless, a big chunk of these losses involves fraud that was made possible by the theft of the victims’ personal banking details. Once compromised, criminals can use access to your banking information to drain your account, make illegal purchases, and even access credit. Criminals have quickly become experts at using technology to steal the information you exchange on computer networks when you use online or mobile banking services, allowing them to profit from the pandemic-era boom in online financial services.

Safe or Sorry? 

While the risks of falling victim to online or mobile banking fraud are real, taking just a few common sense (and often pretty simple) steps has the effect of drastically reducing your chance of becoming a victim. The first step is to ensure that the financial institution you use or are planning to use for your online or mobile banking needs is a reputable institution with the ability to deliver the services you need while protecting your personal information. While it’s tempting to assume that large commercial banks have the best security infrastructure, bear in mind that these institutions have also been the victims of some of the biggest security breaches. Instead, look for specific evidence that your financial institution meets basic security benchmarks and offers a full range of anti-fraud safeguards. Here’s what to look for:

Online Encryption

At the very least, ensure that the websites provided by a bank or credit union are fully encrypted. This means that any information that criminals might be able to intercept between your computer and the bank is nearly impossible to decipher. The simplest way to check this is to look for a small lock icon in the address bar of your browser. You can also tell that a website is encrypted by checking whether the URL starts with “https” rather than just “http.”

Two-Factor Authentication

Look for financial institutions that offer two-factor authentication when you log in to your account from your computer or mobile device. Two-factor authentication is an extra layer of security that requires you to provide two forms of identification in order to access your account. Typically, you’ll provide a regular password as well as, usually, a temporary code sent to your phone to complete your login. This extra step makes it far more difficult for criminals to access your information by pretending to be you.

Activity Monitoring

Choose a financial institution that monitors your account activities for any unusual behavior. Constant monitoring that compares activity to your typical spending patterns helps identify suspicious transactions so your financial institution can act quickly to protect your account. Activity monitoring is usually provided as part of your financial institution’s checking account services. You’ll receive a text message or phone call if any suspicious activity is observed.

Fraud Alerts 

In addition, check whether you can sign up for fraud alerts. You can often opt into a service that ensures you are notified if transactions are detected over a specific dollar limit or outside a particular geographic area. Some institutions even allow you to turn fraud alerts on and off and to adjust your settings from your mobile device.

Identity Theft Recovery

Check if your financial institution offers either free or opt-in identity theft recovery services. These can be invaluable if your financial information is compromised. In addition to taking steps to protect your account and replace your cards, recovery services also help you contact merchants where fraudulent payments were made, close accounts opened illegally in your name, and work with credit bureaus to correct your credit report

Seven Ways to Bank Safer Online

Once you’ve chosen a  financial institution to handle your online banking needs or signed up for mobile banking at your existing institution, here are seven relatively simple steps you can take to make cyber-criminals work harder. 

1. Choose Strong Passwords

Choose unique and varied passwords for each of your online accounts. Avoid using easily guessable information like your name, birthdate, or common phrases. Use a combination of letters, numbers, and special characters, or let a password manager generate one for you.

2. Avoid Public Wi-Fi

Avoid accessing your online banking accounts on public Wi-Fi networks. These are always less secure than private networks and far more susceptible to electronic eavesdropping. Criminals use software that can capture your password before you enter an encrypted site.

3. Set Up Two-Factor Authentication

If your financial institution offers it as an option, use it! It makes accessing your account too difficult to be worth the trouble for all but the most determined of criminals.

4.  Keep Antivirus Software Up to Date

Criminals are constantly finding new ways to bypass the security features built into banking software using worms and other information-stealing viruses.  Regularly update your antivirus and anti-malware software to protect your devices from potential threats.

5. Sign Up for Account Alerts

Again, make use of the security offered by your financial institution. Taking just a little time to sign up to receive alerts for suspicious activity in your account can spare you a lot of headaches later. The alerts can include unusual transactions or even attempts to log into your account from a different device.

6. Be Cautious of Payment Services

While digital payment services like Venmo, Zelle, and Cash App make it easy to send money to almost anyone from your device, these services offer far less protection than transactions handled using your card or online bill payment service. Be cautious when using third-party services to pay anyone but your trusted friends and family.

7. Avoid Phishing Scams

As financial institutions get better at preventing hacking attacks, criminals are getting smarter at tricking people into revealing their banking details, which is called phishing.  Be cautious of any emails, texts, or calls requesting personal or financial information. Reputable financial institutions will never ask for sensitive information through these channels. Be very cautious of unsolicited phone callers claiming to be from your bank or credit union. Do not click on links to websites contained in suspicious emails. If you are unsure, log into your account separately, make sure the URL is exactly the same as your bank or credit union’s, and always look for the lock encryption icon. 

What If You Think Your Account Has Been Hacked?

If you have not signed up for activity monitoring or fraud alerts on your accounts, you likely won’t know that your account is under attack or has been compromised until it’s too late to prevent it. Here are some typical telltale signs that your account has been hacked: 

  • Unfamiliar transactions in your account activity or statement
  • A sudden drop in account balances
  • Card or transactions denied despite available funds
  • Unable to login to your bank or other accounts
  • Calls from merchants or collection agencies about unpaid balances
  • A sudden change in your credit score
  • Unfamiliar accounts listed on your credit record

While it can be frightening to discover someone has gained access to your accounts or personal information, it’s important to act quickly to minimize the potential impact on your finances. Here are some key steps to take:

1. Freeze Your Card

Immediately freeze your debit card or other cards linked to the compromised account to prevent further unauthorized transactions. One of the significant advantages of online banking and mobile apps is that you can often turn your cards on or off right from your desktop or device. 

2. Report Suspect Transactions

Contact your credit union or bank’s fraud reporting line and tell them about any suspicious transactions. You are unlikely to be held liable by your financial institution for unauthorized transactions provided you report potential fraud quickly. 

3. Arrange to Have Your Cards Replaced

Request to have any cards linked to the hacked account replaced with new numbers to ensure that no further fraud occurs. Most credit unions and banks will replace your compromised cards for free.

4. Freeze Your Credit

Consider freezing your credit with the three main credit reporting agencies ( Experian , TransUnion , and Equifax ) to prevent identity thieves from opening new accounts in your name. Just remember you’ll need to unfreeze your credit in order to apply for further credit in the future.

5. Sign Up for Credit Monitoring

Also, think about signing up for a credit monitoring service. These are offered by both the credit bureaus themselves as well as third parties and will inform you of any attempt to access additional credit or open new accounts using your personal information.

6. Dispute Transactions

If you are worried about being held liable for a fraudulent transaction you should contact either your financial institution or the concerned merchant directly to explain that the payment was unauthorized. Responsible merchants will also try to prevent the delivery of any purchased goods or services.

7. Check Your Credit Report

You should check your credit report carefully in the weeks and months following any unauthorized use of your banking information. You can access a free credit report here or contact the bureaus directly. 

Join the Online Banking Revolution With Best Reward

While taking your financial life online might seem daunting, taking just a few simple steps can make it much harder for criminals to access your accounts or information. Being smart about online and mobile banking opens up a world of safe, convenient banking options. When choosing an online banking provider, it pays to partner with an institution that actually knows who you are. At Best Reward Federal Credit Union, we offer all the ease and convenience of full-service online banking, but with the personal care and service you won’t find at a major commercial bank. Members who choose our Share Draft Checking service enjoy:

  • No Monthly Fee
  • No Minimum Balance 
  • Free Online Banking
  • Free Mobile Banking App

Contact us today to enjoy the full benefits of remote banking from your electronic device or click below to learn more about the many benefits of choosing a credit union like Best Reward for all your financial needs.

How to Choose a Credit Union