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How To Identify Money Scams

1. Common Online Money Scams To Be Aware Of
2. How To Be Safer With Your Online Banking

A lot of people are afraid of online banking. With all of the cheesy movies focused around the scary Internet, who would ever want to put their money online? It is no doubt that security is a major concern for everyone.

Online banks are focused on security much more so than any off-line branch of their bank. Banks realize that as a new generation takes over, many more people will be banking online. Kids today have a really handle on the validity and use of the Internet. But, kids don't have any money. As younger generations take over and they compare online banks to off-line banks, the only natural choice they will make is to put their money in higher yield setting. Online banks will continue to have a higher yield due to the lower overhead required. Assuming this trend continues, at some point many banks will focus their products to only the online space.

Banks are increasing their online business and taking the burden off of their customers. Many banks provide guarantees to customers. Such as HSBC's zero-loss guarantee. If fraud is committed against you, the bank will not hold your account liable for any damages. That guarantee is pretty powerful. Heck off-line banks don't offer that. I had a friend who was robbed at any ATM while on vacation a few years ago. He was charged $50 by his bank to refund the amount to his bank. They had it on camera and they made him pay $50?

I think world renowned convicted computer hacker Kevin Mitnick summed it up best in a recent CNN interview:

CNN: How much do you trust online banking and the usage of credit cards online?

MITNICK: I trust online banking. You know why? Because if somebody hacks into my account and defrauds my credit card company, or my online bank account, guess who takes the loss? The bank, not me.

How To Know if Your Online Bank is Legit

With all the scammers out there today, a great bank web site can be easily copied by a scammer. The site can then be rolled off to look exactly like a legit site. The only purpose is to steal as much information as they can about you and have them clone your identity.

These scammers are really getting balls lately and creating entire false banks. How do you know whether or not the bank you want to signup for is a legitimate?

Here are some quick tips to stay safe:

1. Make sure your money is FDIC insured-

Check the FDIC's site for the bank listing: http://www2.fdic.gov/idasp/

Also verify this on the Bank's FDIC insurance blurb on their site. The insurer numbers should match. Some Online Banks are not FDIC insured. Don't ever do business with them.

2. Never do business with a bank that contacts you first-

If you see that there is an offer that interests you contact the bank on your own terms. Find there phone numbers on their site, not their marketing materials and start the process of signing up from there.

3. Do a DNS search-

A good way to identify a fake from a real site is to check who registered the domain name. This should jive with all of the information on their site. Just plop their domain name in over at

http://www.dnsstuff.com

You'll get an address that should match their about us stuff. If an email was sent to you, you can also trace the physical location of where that email came from.

What Security Precautions Do Online Banks Take?

Many banks lets say, "Get it!", when it comes to security. Then again some banks are out to lunch. In some cases, I have seen two or three online banking systems where I withdrew all of my money, the first day I logged in. For those banks it was the equivalent of running a bank branch without locks of any kind on the doors and vault. Here is a list of the standard practices you will find:

1. Every piece of data to and from you runs over Secure Socket Layer (SSL) Encryption-

SSL makes it really difficult for a hacker to make any sense of information sent to and from. Assuming the hacker was monitoring your connection or the bank's.

2. Firewall and Internal Encryption-

Banks will brag about this and it is necessary, but it is the equivalent of you running Internet Security Software.

3. Triple log in procedure-

Banks have always used a user name and password system of some type. The triple level usually adds a clickable pin number. The logic here is if it's done with a mouse, key logging malware is going to be useless to hackers.

4. Personalization-

This is the next step in fighting spam. The only problem is that many people don't take the time to understand and see it as just another hoop the banks are making us jump through. Using personalization, you can really be sure you are on the bank's web site and not a hackers home. The basic procedure is a single layer, you provide the bank with a user name maybe and then you click to sign in. Now you view a personalized message you have put in for yourself. In some cases, they show you a personalized image as well. This just might be the end of phishing if ever bank and bank customer started understanding the procedure.