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. 

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. 

Using Quicken for Internet Banking

Many people use quicken to keep track of their internet banking.  It is a way to make transaction details more clear.  It also allows you to keep your personal or business records on your computer, and at the same time, use the services of internet banking. 

Quicken is a software program for managing money.  Other examples of such programs are Microsoft Money and Quick Books.  Quicken and these other programs make your record-keeping more detailed and accurate.  They can also be used in conjunction with internet banking. 

The first thing you can do before doing internet banking is to set up an electronic check register.  This is similar to the traditional check register, with a few distinctions.  For one thing, the information you put into the electronic check register can be more detailed than you can put on a line or two of a paper register. 

You can put the check number or transaction type, the date, the payee, and the amount.  These are essentially the data you would put into a paper register.  On Quicken, however, you can categorize the entries.  You can use preset categories or make up your own.  Your internet banking transactions may have special categories. 

For example, transfer of funds from one account to another through internet banking would be in a different category than other deposits in most cases.  You can also get creative with your categories.  If you are a musician, you might have a category for guitar equipment, for example. 

There are two ways to get the information from your internet banking website into Quicken.  One way is to set up your account on Quicken.  You will need to type in all your personal information that needs to be provided to access your account.  This includes name, account number, username, and even password. 

This information will be stored on your computer in the Quicken program until you tell Quicken to download the latest transactions from your internet banking account.  It will do this automatically.  It will log on, download the transactions and log off of your internet banking website. 

This is not a very secure method, since all your information is easily accessible to anyone who gets their hands on your computer.  There is a different means to do this.  This takes a little more effort, but it pays off in tighter security. 

You go to the internet banking website and view your statement online.  The internet banking set-up will give you the option of downloading transaction data to your computer.  Use the drop down menu to select the program to put it in, such as Quicken. 

Once your internet banking transactions are successfully loaded into Quicken, you can reconcile your account.  Quicken will check your electronic register against the information from your internet banking account.  If they do not match, you will be alerted.  You will then be given the option to correct individual transactions or to correct all discrepancies. 

This way you can keep up with your internet banking account regularly and with precision.  You will know when you make mistakes or fraud has occurred.  Using Quicken with internet banking is a good way to understand and manage your finances. 

Transferring Funds through Internet Banking

Internet banking offers consumers the ability to transfer funds between accounts.  This is an important service as the world becomes a smaller place.  There are many places people want to transfer money and many reasons to do so. 

People often want to transfer money from one account to another.  For instance, they may want to transfer funds from their traditional account to their internet banking account.  This could be a means of getting money into the account they normally use to pay bills. 

Another use of internet banking to transfer funds is to move money from checking accounts to savings accounts.  Money can be transferred from investment accounts as well.  Any accounts you have can be accessed through internet banking to do this. 

They also may want to transfer money from an account in one location to an account in another.  This would be useful for someone who lives a bicoastal existence for example.  When they are spending part of the year on the East Coast, they can have their money in an East Coast bank.  Then, they put it in the West Coast bank while they live there. 

This can be done through internet banking by using a traditional bank with internet banking capabilities.  You can send the money to your other account almost instantly by using your keyboard and mouse.  In fact, if you do it often and have it set up, you might only need your mouse once you get logged on. 

Another reason to use internet banking accounts to transfer funds is to send money to someone else's account.  This could be done to help someone in your family.  For instance, you might get a call from your daughter, a young adult.  She may need money to cover an emergency car repair so that she can get to work.  With internet banking funds transfer, you can have the money in her account in no time. 

Some people contract jobs from out-of-country workers.  These people need some way to send payment to their workers.  Internet banking funds transfers allow them to put the workers' paychecks into their accounts without hassle. 

Overseas products are often imported by businesses or even, on a smaller scale, by individuals.  Internet banking provides a means to carry out these purchases by means of funds transfers. 

To transfer money to another of your accounts, you can log onto your internet banking website.  There should be a tab for "funds transfer."  Click on this and you will be given options.  Usually, you will set up the different financial establishments where you have accounts.  Then they will be ready if and when you want to transfer funds. 

When you want to send money to another person's account, there is usually a different procedure to do this.  You may have a different tab to select, such as "pay person."  This will help you set up the funds transfer to another person's account through internet banking.  In either case, you can set it up for one time only, or for recurring transfers.  This is handy if you have an elderly relative on a fixed income that always needs help. 

Using internet banking to accomplish funds transfers is an effective way to approach many problems.  If you are ever wondering how to get money from one place to another, log on to your internet banking site and check out funds transfer details. 

Security Measures Taken by Internet Banking Companies

You cannot do business online if you do not trust your internet banking company.  There are always unscrupulous people trying to access bank information.  It is just a modern version of the old-fashioned bank robbery.  However, internet banking companies go to great lengths to avoid this. 

Internet banking should be done only through secure connections.  There are two ways to make sure you have one.  One is to look near the line where you type in URL's.  If you have a secure connection, there should be a closed padlock there.  Also, the web address should say https://"  The "s" signifies a secure connection for your internet banking. 

  Encryption is the first line of defense for internet banking security.  Banks have 128-bit security and require you to have it on the browser you use.  Encryption is basically just a formula that puts your information into a code.  That code is indecipherable without a key. 

Many banks use the Secured Socket Layer encryption for consumers' internet banking transactions.  This is a special form of encryption.  The system will use a different master key to put each transaction into code and then that code will not be used for other transactions. 

Banks also pay considerable attention to their firewalls.  They want to be assured that their internet banking system is protected from attacks over the internet.  So, they are not connected directly to the web.  Their connection is made through a firewall which blocks unwanted activity on the server. 

Special consultants are hired by internet banking companies to help with security, too.  They do this by trying to hack into the bank's secure server.  Once they do, they know how it can be done.  Then, they come up with ways to prevent it from happening. 

One system that has come from using such consultants in internet banking is the use of two factor authentication.  With this form of security, an access number will be sent to you over your cell phone to use with your other identifying information.  With all this information together, you can access your account.  This is more secure. 

Most internet banking institutions will also protect you from yourself in some ways.  If you are using your computer to go online and do internet banking transactions, you cannot let the computer sit idle.  If you do not use it for a certain period of time, the bank will end your session and your will have to do a secure log-in all over again.  This prevents anyone from finding your account page open and using it without your consent. 

Clicks to bricks banks will often give you a username and a temporary password.  You will then choose your personal password and other security features.  Virtual banks will allow you to choose both your password and your username.  They will never have access to this information.  This means that it is secure for you to use. 

Internet banking is a difficult pill for many people to swallow.  Especially for those who did not grow up with computers, it may seem a little unreal to manage your money online.  However, internet banking security makes everyone breathe a little easier. 

Problems with Internet Banking

Most people who have accounts with traditional banks do some internet banking now.  Some are hesitant because of problems they see in the industry.  While there are some disadvantages to internet banking, many of the problems start with the consumer. 

For example, there are still quite a few people who do not use internet banking because of their own lack of knowledge.  They may be resistant to technology.  They may feel that it is too difficult to learn.  Because young people are exposed to computers at an early age, people who have this problem are usually older. 

Some of the same people also fear using the internet.  Others who will use computers offline will not use them to go on the internet.  They fear for the loss of their privacy.  Many of these people have exaggerated fears in their minds.  For them, internet banking will be impossible, unless they come to terms with their fears.   

Certain people just do not have proper equipment to go on the internet.  If does not take an extremely advanced computer to do internet banking transactions.  However, you do need the basic modern computer equipment with modem.  Most banks now expect you to have a 128-bit encryption browser.  You will also be better off if you have a faster internet connection than dial-up. 

Security is a problem for many users of internet banking, as well.  The user names and passwords are often complex.  This is good, for the most part, because no one else would guess them.  However, it can be a problem if you cannot remember them.  You might not be able to access your account when you want to, without going through an intense security procedure. 

What is even worse, many people who know they will have trouble remembering their user names and passwords for internet banking will write them down and keep them near their computers.  This makes it easy for thieves to get in and steal money from their accounts. 

Then, there are disadvantages that are really only to do with the internet banking more than the customers.  One problem happens when the bank's computer system has an extremely high volume.  Your transactions may not be made in a timely manner. 

There can be other failures in the communications of banks that will cause errors or lags.  If a computer virus ever got into the bank's computers, it could be a real problem.  Clearing up the chaos might take awhile.  Fortunately, internet banking companies take many precautions to prevent this, so it is extremely unlikely to happen. 

If you do internet banking through a virtual bank, you might find problems in managing cash money.  Depositing a paper check that someone gives you might not be as fast as it would be for a traditional bank.  Virtual banks usually will not let you deposit through an ATM, so often your only choice is to mail it to them. 

While there are some problems with internet banking, most of them can be overcome with knowledge and caution.  The other problems are challenges for the future of internet banking.