By Amy Fontinelle
Unscrupulous individuals are waiting to steal money from the bank accounts of those who aren't careful or don't know better, and it's significantly more challenging to recover funds stolen from a bank account than to get charges reversed from a stolen credit card. While there are certainly people who have been victimized despite doing everything right, it's best to minimize the chances that you'll be targeted by taking some simple measures to protect your checking and savings accounts against unauthorized use and theft.
General Banking Precautions and Safeguards
Follow these basic tips to help protect your accounts:
- Never write your Social Security number or driver's license number on your checks.
This information makes it much easier to steal your identity. If a store employee says they can't accept your check without it, pay using a different method (why not just use your debit card? The funds come from the same place.). (For more tips, see Identity Theft: How To Avoid It.)
- Be skeptical of bank calls.
If you receive a phone call from your bank, even if it appears to be legitimate, don't provide any personal information over the phone. Instead, say you'll have to call them back, then look up the bank's contact information on your bank statement or at the bank's website. This way, you'll know you're really talking to the bank and not to a possible scammer.
- Don't choose an easy-to-guess number for your ATM PIN.
Don't use PINs that crooks could easily figure out, such as your birthday or address. Either choose a random number or one that is meaningful to you but not guessable by others. Also, make sure to memorize this number, and definitely don't write it down in a place where it can easily be stolen, like on your ATM card or on a scrap of paper that you store in your wallet.
- Shred old bank statements and canceled checks.
You should never just throw away information like this, as it contains your bank account number, name and address. Tossing personal data like this in the trash just makes life way too easy for identity thieves.
- Choose the "credit" option when using your debit card in stores.
The money will come out of your checking account no matter which option you choose - why give nearby customers or store employees the opportunity to figure out your PIN?
- Safeguard your mail.
If you have to mail something with sensitive financial data in it (which can be something as simple as the check you mail to pay your electric bill), don't put it in your mailbox. Take it to a post office and drop it in their secure mailbox instead of leaving it out on the street for anyone to steal. Also, collect your mail promptly after it's delivered each day, get a locking mailbox, or have all your statements and other bank communications delivered electronically to avoid the theft of sensitive financial information from your mailbox.
If you bank online, you can be an easy target for hackers. To improve your odds of avoiding them, follow these guidelines.
- Never do online banking in a public place.
If you're using the internet at a library, for example, you shouldn't log in to your bank account there, whether you're on your own computer and accessing the library's wireless network or on a library computer. You really have no way of knowing how secure their network is or whether any of the library computers have been infected with keyloggers or other methods of stealing your banking information. Also, there's the risk that someone else could be watching you type your login information. In addition to libraries, you should also avoid online banking in coffee shops, airports, and anywhere else where network security is questionable.
- Memorize your login information.
If you have your login name and password written down anywhere, you're at risk for someone else stealing it. If someone breaks into your house and you have the information filed away, it might be stolen or copied. If you email your login information to yourself and the security of your email account is compromised, your information can be stolen that way. And you certainly should not carry this information with you in your wallet, because your wallet could be lost or stolen. If you're worried you'll forget this information, write down some hints to yourself that will help you remember it but that a third party won't be able to decipher. Also, keep in mind that it shouldn't be too difficult for you as the legitimate account holder to recover a forgotten password and/or username, so it's not the end of the world if you can't remember it later.
- Use complex login data.
Internet security professionals recommend using complex usernames and passwords that include some combination of symbols, numbers and upper- and lowercase letters. As well, you shouldn't use dictionary words or anything that would be easy to guess (so don't use your home address as your online banking password).
- Make sure your home network is secure.
The best place to log in to your bank account is from home - unless your home network is not secure. If you don't have a firewall plus spyware and antivirus protection that you update regularly, and if you don't practice safe browsing habits (such as not opening spam or those forwarded email attachments that circulate in email messages), your home network may not be secure and may be making it easy for hackers to steal your information.
- Be careful with email.
If you receive an email that appears to be from your bank and asks you for any personal information such as your account number, debit card number, PIN, login ID, or password, you can bet it's from someone who wants to steal from you. Banks do not send emails asking for personally identifying information. You should also not download attachments from emails that are supposedly from your bank, nor should you click on links in such emails. Even if you think you've received a routine email, such as one notifying you that your monthly statement is available, don't click on any links in the email. It only takes an extra few seconds to open a new browser tab or window and go directly and safely to the bank's website.
Our final tip about protecting the money in your bank accounts has nothing to do with theft - it relates to the financial stability of your bank. Federal deposit insurance protects consumers' bank account balances up to a certain amount as long as they're at a legitimate bank that is a member of the Federal Deposit Insurance Corporation (FDIC). According to the FDIC, "since the FDIC's creation in 1933, no depositor has ever lost even one penny of FDIC-insured funds."
Under legislation passed during the financial crisis of 2008, FDIC insurance protection was expanded from $100,000 to $250,000 per depositor across all accounts of the same category. This change is set to expire on December 31, 2009. If the amount of money you keep in bank accounts exceeds current federal deposit insurance limits, you'll need to do some planning so that if a bank fails, all of your money will be protected, not just the first $100,000 ($250,000 through 2009). There's nothing wrong with doing this - it's perfectly legal. If your account balance exceeds FDIC-insured limits and you want to make sure all your money will be safe, visit the FDIC's website for more information.
That's it - you've reached the end of our banking tutorial. In the final section, we'll summarize what you've just learned.
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