Internet Banking

What Is Internet Banking?

  

Even those slow to warm up to technology are beginning to use internet banking.  It is often more convenient than banks that do not have such services.  Sooner or later, most people find it hard to resist.  Yet some still do not know what internet banking is. 

There are two types of banks that do internet banking.  Many brick and mortar banks or credit unions are now offering online services.  This still allows customers of the bank the option of going to the building to do their transactions in person.  Or, they can take advantage of internet banking services through a bank website. 

The other type of bank that does internet banking is a virtual bank.  These banks do not have a location where you can go in person.  They only do business over the internet.  With banks like this, you do not have the option of visiting your local branch and making a deposit. 

These banks charge very little for internet banking.  Their services may even be free.  Virtual banks can afford to do this because, without a building to maintain, they have lower costs.  They do not make their money by charging for standard transactions in most cases.  Banks and credit unions also charge little for their online services. 

You can make a variety of transactions by way of internet banking.  You can pay bills directly from your checking account.  This saves you the cost of a stamp.  It also gives you more leeway in how quickly you need to pay the bill.  If you have to mail it, you have to send it out long ahead of time. 

Funds can be transferred from a checking account to a savings account, or vice versa.  You can fill out loan applications for anything from signature loans to mortgages online.  You can even use internet banking for investments.  All these services are available at both types of banks. 

You can view your transactions whenever you want.  If you have software for your computer, you can download the information from your internet banking account to your virtual check register, in Quicken for example, and reconcile automatically.  

You can access your internet banking account any time, day or night.  As long as you have an internet connection of any kind, you are in business.  You can do your banking from a laptop in a hotel room, or from the computer in your home.  You will find it easy to get the information and do the transactions you want. 

Extra caution is taken when setting up internet banking systems.  If you have an account online, you will have a complex password.  The information will be encrypted.  There might be security images you can choose from that no one would have a way of knowing.  Furthermore, if you try to make risky transactions, you will be asked more security questions. 

Online banking is becoming more and more popular.  You can do most of it without leaving your home, if you wish.  Internet banking is a safe and convenient way to handle your money. 

Your Consumer Rights in Internet Banking

There is much controversy over whose responsibility it is when something goes wrong in internet banking.  Banks sometimes step up and hold themselves accountable for security measures as they should.  Other banks want to lay the burden on the consumer. 

You do have rights as a customer of internet banking.  For example, a phishing scheme might lure you into giving out your personal information.  This, in turn, could result in your internet banking account being raided. 

Internet banking companies are quick to point out that it is your responsibility to keep your username and password secure.  It must be un-guessable in the first place.  You must never write it down.  You must tell no one. It is your consumer right to keep this information to yourself and not divulge your password to a bank employee. 

You might be wondering who is responsible.  After all, you did fall for the scam, not your internet banking establishment.  You were the one who gave out all that information.  However, there is a regulation of the federal government that can help you.  It is referred to as Reg-E. 

This is the Federal Reserve Board's Regulation E.  It covers all kinds of situations revolving around transfers made electronically.  The most important thing to remember about Reg-E is that you will recover your internet banking losses according to how soon you discover them. 

For instance, you might get your internet banking statement, see that fraud has taken place, and report it immediately.  In this case you will be required to recover your money.  Yet, you could get your statement, let it set on the server for two weeks without looking at it, and then discover fraud.  In this case, you would get less of your money back. 

The longer you waited, the less you would get.  At some point, you would lose everything in the account plus overdraft charges.  That is why it pays to take a quick look at your internet banking account frequently.  Even if you do not have time to go over every transaction, you will often notice discrepancies that you can report. 

If you wait two days or less from the time you get your official internet banking statement, you will only be liable for the first $50.  Another day and the price goes up to $500.  After 60 days, you have no recourse through the bank.  You would actually have to find the perpetrators of the crime, bring them to justice, and be awarded compensation. 

Furthermore, your internet banking is protected in ways that traditional banks are always protected.  You should receive safeguards to your personal banking such as the Fair Credit Opportunity Act.  The Truth in Lending and the Truth in Savings Acts are important to internet banking customers to assure that they get what they have agreed to.  Banks in this country are also required to have FDIC insurance. 

Most internet banking companies are on the level.  They are trying to establish a name for themselves through tight security.  Barring that, they seek to remedy the situation with great customer service.  Find a bank like this and you will have no problem getting them to respect your consumer rights. 

Why Some People Fear Internet Banking

Some people could not be happier with internet banking.  Others fear it and want no part of it.  Sometimes these people will give you reasons for their fears.  Other times, they will just say they do not like it and leave it at that. 

Some people are simply shy.  They do not want to even get on the internet, much less do internet banking.  These people often see the internet as a vast community of people that do not know them.  Perhaps this is more alarming to those who have grown up in tight-knit communities. 

At any rate, shy people will avoid internet banking because they feel embarrassed about what they are doing.  It is not that they are doing anything wrong.  It is just that they feel scrutinized by a larger group of people than they would at their local bank. 

If these people can understand that their internet banking transactions are their own private business, they will be less alarmed.  If they can see that the internet is not a tool to make them feel embarrassed, they can begin to get comfortable with it.  Some of these people eventually overcome their fears and become the most avid internet banking customers. 

Other people are afraid that using their computer for internet banking will lead them to obsess over money.  They feel that if the information is available to them at all times, they will have a hard time ignoring it.  They think they will be consumed about every little thing that is happening with their account. 

Some people may actually have this problem at first.  The answer is to set limits on your internet banking time.  Do not check over your account more than once a day unless you have a very good reason to do so.  Take time to write out what those reasons would be limited to, and then stick to it.  Eventually, the new will wear off and reasonable internet banking use will prevail. 

One fear is that internet banking will lead the person to deal in a paperless business environment.  They fear that if they do not have written proof of transactions, they will lose the ability to prove anything.  They want the control a piece of paper seems to give them. 

The truth is that internet banking does not have to be completely paperless.  For those who want a paper trail, it is easy to construct one.  You can print off transactions.  You can keep ATM and debit receipts.  You can print off a monthly statement.  You can even print off a copy of a given check, in most cases. 

Most people have some fears about internet banking security.  Indeed it is a difficult business keeping up with those who would break into the virtual vaults.  However, with encryption, firewalls, and other forms of security, banks are making internet banking fairly secure.  They are constantly working to better security too. 

It is good if fears about internet banking can be overcome.  Internet banking is a useful tool to make life easier for those who employ it.  If you are hesitating about starting an internet banking account, be courageous and give it a try. 

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