Ask questions about high-tech banking services

By Rosemary Heins, University of Minnesota Extension

ST. PAUL, Minn. (2/25/2008) — Speed, convenience and flexibility are being added to banking services by the use of Internet and telephone banking. While the new services can provide benefits, they aren’t for everyone.

Ask these questions before trying a high-tech service:

• How will this service make my banking simpler or more convenient? For example, if you are still new to navigating the Internet, an online bill-paying system might not save you time. But the time spent learning may help save money on postage and check printing fees.

• Will mistakes or unauthorized transactions be simple to detect and correct? Accessing transaction records online is faster than waiting for a statement in the mail. However, there can be a lag between a transaction and its appearance on your electronic ledger. Always document transactions in a check or transaction register, and crosscheck with the electronic ledger. Correcting a problem will often still require talking with a bank employee.

• What is my liability under federal law if someone obtains my account numbers and commits fraud or steals from my account? The Electronic Funds Transfer Act provides protection for all transactions using your debit card or other electronic means to debit or credit an account. It also limits your liability to $500 for unauthorized electronic fund transfers. Check to see if the bank offers more protection at no cost.

• What security procedures do you recommend for consumers? Ask the bank how you can help prevent fraud. Use passwords that can’t be easily guessed like your mother’s maiden name or your birthday. Be aware of people around you when punching in account numbers on your cell phone or at an ATM. If you sign into your account on a computer, sign out when you leave.

• How does the bank protect my private information, such as my balance and how I spend my money? Privacy policies are often posted on the bank’s website. Many banks reserve the right to share information about you with marketing companies. You may ask to opt out of this practice. The bank must share information when required to by law.

• How much will it cost to use the service, including any equipment or cards I must purchase, or monthly transaction fees? This is one of the questions that will help you shop around for the best value and prevent unwelcome surprises on your bank statements.

Any use of this article must include the byline or following credit line:
Rosemary Heins is a family resource management educator with University of Minnesota Extension.

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