By Christina Lavingia, Editor
Cybersecurity -- or a lack thereof -- has consistently made headlines this year. The news that two-thirds of American households were compromised due to a breach at JPMorgan Chase is just the latest in a long list of security scares, from Target's Black Friday hacking to Home Depot's issue with stolen credit card data.
As security improves, so do the tactics of hackers, it seems. Risk is everywhere -- but if the last year has taught us anything, it's that staying offline won't necessarily keep you safe. Whether you're swiping your card at a retail store or entering your pin at an ATM, there's always the chance that somebody else could be accessing your personal information.
Even so, security concerns make a significant number of consumers wary of an incredibly beneficial tool: mobile banking.
GOBankingRates conducted a poll to find out what scares consumers most about banking in the digital age. While 43.7 percent of respondents said they have no major concerns, more than half of those polled are worried -- and, for most of them, identity theft is the main concern. In fact, two in five of the mobile banking users we polled -- about 37 percent -- said this is their biggest fear.
>>> Click here for the complete poll findings.
Whether or not digital banking worries you, it's wise to exercise caution to safeguard yourself and your funds. ComScore reports that 174 million Americans own smartphones as of August 2014, totaling 72 percent of the mobile phone market -- meaning a huge number of people could be affected by a mobile data breach.
That said, banking online or over the phone has numerous benefits, from convenience (a reduction in trips to the bank) to improved account monitoring (real-time notification of activity). And regardless of risk, people like using online and mobile banking, with 51 percent of U.S. adults banking online and 35 percent of cell phone users banking on their phones, according to Pew Research.
Clearly, you shouldn't avoid banking in the digital age -- but, as with any activity where your personal information is involved, you should be safe about it. Here's how.
Protect Yourself From These 6 Digital Banking Fears
1. Identity Theft
Any time you have to enter sensitive information in an online form, like your Social Security number, address and phone number, it's natural to feel a twinge of hesitation. These companies are asking for all the components necessary to steal your identity, and with the prevalence of fraudulent sites and phishing schemes, not even an official-looking site is truly safe. Of those who claimed to have a concern regarding digital banking, more than 37 percent of respondents in our poll identified theft as their biggest concern.
To protect your identity online, the FTC recommends that consumers:
- Beware of imposters requesting sensitive information
- Remove all information from computers before disposing of them using a wipe utility program
- Extract SIM cards and delete all information permanently, especially pertaining to contact lists, calls made and received, voicemails, emails, and web histories
- Install encryption software on their devices
- Maintain unique, strong and varied passwords for different sites that request your personal information
- Don't overshare on social media sites, as information could be used to get through verification questions
- Be wary of public Wi-Fi, as any account activity in that network might not be protected
Whenever asked to provide your Social Security number via telephone, ask why it's needed, how it will be used, how it will be protected and if you can verify your identity through other means. You can call a business, as well, to ask these questions if the information is requested on an online form. If you're ever contacted by someone requesting this information, hang up, look up the institution's phone number from their official site and call back to confirm what you were told.
Many companies never initiate a call requesting sensitive information, a good indication that any communication in this vein is a hoax.
"At Chase, we are dedicated to making the payment experience safe and secure for our customers," said Scott Rau, director of mobile payments for Chase.
We use a variety of technology tools to ensure this experience, no matter how the customer chooses to pay, and combined with our best-in-class fraud and analytic tools, we believe we can offer customers payment solutions for ease of use with all the liability, fraud and security protections available.
Related: What Your iPhone or Android Is Telling ID Thieves
2. Technical Errors Resulting in Missing Funds
Of course a technical mistake is a factor consumers must contend with when banking digitally. Unlike visiting a bank branch and meeting with a banker in person, a digital interface might be more prone to errors that result in misappropriated funds and overdrafts. However, knowing your rights when it comes to disputing mistakes is your first step toward peace of mind.
According to the FTC, consumers have 60 days from the date of a periodic statement containing an error to file a claim. Once notified, financial institutions have 10 days to investigate and three additional days to inform you of their findings. This window can be extended to 45 days so long as the financial institution temporarily reimburses the funds until the investigation is complete.
Knowing this, keeping a pulse on your account activity is all it takes to get over this digital banking concern.
Related: Best Way to Work With Your Bank to Correct Mistakes
3. Misuse of Information by Companies
Notice how advertisements and Google results reflect your recent online activity? That's not an accident. Companies track your online behavior to better tailor their marketing efforts to relevant consumers, and many sell your personal information to other companies.
Yes, privacy policies are long; however you can gain confidence by reading the privacy policies of the sites you're on. By knowing what agreeing to a site's terms and conditions really means, you'll feel more in control of your information and aware of what a company can do with it.
4. Lack of Documentation
Paper statements force consumers to take a look at their spending habits and evaluate how well they're performing financially. But in an increasingly digital world, consumers and financial institutions alike are transitioning to e-statements -- some financial institutions actually require that account holders opt in to e-statements to receive the posted interest rate.
While environmentalists and tech-savvy individuals see this as a blessing, you might still appreciate receiving a paper copy monthly -- worrying that a lack of paper statements will cause you to neglect your account balance and activity.
One way to address this concern is to apply the same due diligence your bank put into mailing you regular paper statements to your personal finances. Set a calendar reminder to log into your account monthly to maintain the same awareness of your account activity -- or set up a filter to flag your bank's emails as "important."
"In one key way, online or mobile banking actually reduces the risk of fraud," said Andy Prescott, CPA, CISA and founder of artofbeingcheap.com. "Because these systems make it super easy to check your balance every day, consumers who frequently use mobile or internet banking will discover unauthorized transactions faster, and be able to alert their bank."
Related: 7 Banks and Credit Unions Giving Perks for Going Paperless
5. Lost or Stolen Phone
"Thieves know that carrying a smartphone is like carrying $500 in your hands," Kevin Mahaffey, co-founder of mobile security firm Lookout, told The Associated Press. Lookout estimates that lost and stolen cell phones cost Americans $30 billion a year. Understandably, you might be worried about storing sensitive login information in your phone should it land in the wrong hands; however, there are steps you can take to protect yourself before your phone goes missing -- and even after the fact.
According to a poll by Intercede, 63 percent of respondents are worried about the security on their mobile devices, while 84 percent of those respondents worry about data loss and identity theft in the event that their phones are stolen.
There are different security options available depending on your smartphone. The iPhone, for example, comes with the choice of a simple or complex passcode to unlock your phone, the ability to lock someone out after 10 incorrect passcode attempts, and the option to prevent all access to your phone from the locked screen.
Once stolen, the Find My iPhone app can track and secure an iPhone remotely. The "lost mode" can be activated to place a passcode on your phone and to send a message to its lock screen requesting its return. The iPhone 5S, 6 and 6+ all come with fingerprint security, as well.
Android phones are equipped with similar security measures, including a lock code, the ability to control and reset your phone remotely through the Android Device Manager, and the ability to track its location through Google Play, as long as the phone is connected to a network or public Wi-Fi. Windows Phone also sports a Find My Phone app that will help users map their phone's location on Bing.
6. Fraudulent Apps
Of the top 100 paid Android and iPhone apps in 2013, 78 percent were hacked -- 100 percent of those on Android's list and 56 percent of iOS apps, according to an Arxan report. As for free apps, 73 percent of Android apps were hacked last year, while 53 percent of iOS apps were compromised.
The numbers are a bit lower when it comes to financial apps, but the statistics are still shocking: 53 percent of Android apps related to finance were hacked in 2013, while 23 percent of iOS finance apps were.
These mobile banking apps can be susceptible to fraud in the form of phishing. According to Yahoo News, Mizrahi Bank, one of the biggest banks in Israel, was the target of a fraudulent app in June. The BankMirage app looked identical to the real app, but would steal customers' usernames and direct them to redownload the real app, preventing them from being suspicious upon using the app's functionality.
To protect yourself from this risk, follow these precautions:
- Keep an eye out for multiple apps from any one bank and report possible frauds.
- Ensure you're using an authentic app by visiting the bank's official website. Most will have a mobile banking section that explains exactly how to download the appropriate version.
- Make sure you're downloading apps from a credible app store.
- Avoid downloading the app by bookmarking the bank's mobile portal instead. That way you can access funds through your web browser and not the app itself.
Related: 12 Highest-Rated Bank and Credit Union Apps
Methodology:
GOBankingRates.com recently ran a survey of 790 Americans, representative of the U.S. general population (weighted by age, gender and region), asking them what their biggest fear about mobile banking is. Age, gender, income, region and urban density were the demographic attributes recorded for each respondent. Survey respondents were given five options to choose from -- identity theft, technical errors resulting in missing funds, misuse of information by companies, lack of documentation with paper statements and no major concerns.
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