How to Avoid Online Banking Fraud

It's a sad fact that just about any online activity can lead to identity theft and online banking fraud. If you use your Internet connection to manage your bank accounts or buy items from online stores, your personal information is vulnerable. This doesn't mean you should cancel your Internet connection and paper your windows with tin foil, but it does mean you need to exercise caution.

Use Only Recognized Websites

From your bank to the stores where you shop, don't provide personal information-such as credit card information-to vendors whose names you don't recognize. Always type the web address into your Internet browser rather than following links, and verify the security of the site before you use it. These simple steps can prevent the majority of online banking fraud.

Avoid Unsecured Wireless Networks

I never use online banking from any computer other than my desktop at home, which is connected to my router. I don't use my laptop that uses a wireless connection, nor do I access my bank from a coffee shop or any other public Wi-Fi. This is because unsecured wireless networks are like invitations to online banking fraud. It only takes one mistake.

Don't Reply to E-mails

Phishing is an increasingly popular method of obtaining online banking information from unwary consumers. If you receive an e-mail from your bank (or someone claiming to be your bank), don't reply to the e-mail with any personal account information. Instead, type in your bank's website URL and use the contact page, or call the bank directly.

Monitor Your Accounts

According to the U.S. Department of Justice, consumers can prevent online banking fraud by monitoring their account activity. Make sure your bank sends you regular statements via postal mail or e-mail, and search each one for unauthorized activity. Make sure your online banking system is set up to send out alerts so you are notified if someone tries to change your address or other information online.

Utilize Security Tools

Your computer's anti-virus, anti-spyware, and firewall protections are extremely valuable when it comes to avoiding online banking fraud. These program will alert you if someone tries to hack into your personal information. Make sure your anti-virus product is set for automatic updates (every 24 hours, if possible).

Use Unique, Strong Passwords

Your online banking password should be different from passwords you use for other services. According to PC World, the best passwords are easy to remember but difficult to guess. Use an alphanumeric phrase that means something to you, but doesn't reveal anything personal about you (i.e. no pet's names, addresses, phone numbers).

Beware the Phone

As online banking fraud schemes become more complex, thieves use multiple methods of extracting personal information. You might get a phone call, for example, alerting you to potential fraud on your bank account. The phony customer service agent will ask you to verify information, such as your social security number or mother's maiden name. Don't fall for it.

Don't Store Account Information

Some online shops and stores will allow you to store your banking information for future purchases. Yes, it takes longer to type out your account number every time, but it's far more secure. Stick to the manual method of disclosing your credit card number, expiration date and other information.

Online banking fraud techniques get more sophisticated as time goes on, but you can protect yourself by staying abreast of security measures. Take time to educate yourself about identity theft prevention so you'll never have to know what it's like to be a victim.