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Five Tips on Safe Banking for National Consumer Protection Week

March 08, 2010

| MoneyRates.com Senior Financial Analyst, CFA

March 7 - 13, 2010 is National Consumer Protection Week. For this event, the Federal Trade Commission (FTC) has set up a special Web site, www.consumer.gov, to offer a variety of ways that consumers can protect their rights. One of the subjects covered by the FTC is banking.

Five Tips to Protect Yourself

Anyone looking for detailed tips on consumer protection--not just in banking but in other financial transactions as well--should take a look at the full resources offered by the FTC. Here's a highlight of the top five ideas offered by the FTC for protecting your savings deposits:

  1. Use government resources. In addition to the FTC, government agencies such as the Office of the Comptroller of the Currency, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) all frequently offer information on how to protect your rights as a banking consumer. Use these government resources--after all, if you're a taxpayer, you're already paying for them.
  2. Kick the tires of online banks. Online banking can be a great service for consumers. Not only does it offer the convenience of banking from home, office, or anywhere you can access the Internet, but by reducing overhead, it can allow banks to offer lower fees and/or higher bank rates. One of the few drawbacks is that it is much easier to set up a fraudulent Web site than it would be to open a fraudulent bank branch, so you'll want to do some extra research. The FDIC is a good source of information about whether a bank is legitimate and FDIC-insured.
  3. Look for the FDIC label--and don't take the bank's word for it. Speaking of the FDIC, it is a good idea to look for the FDIC logo on bank documents and get written confirmation that the institution is a member of the FDIC. In fact, it would take you very little extra time to confirm that fact with the FDIC itself.
  4. Beware of phishing. Phishing is a broad term for scams that seek to extract confidential information by contacting people and pretending to represent their bank or a government agency. These scams can be very elaborate and have even included bogus Web sites that closely resemble the real thing. Never provide confidential information in response to a phone call or e-mail until you have confirmed via a known banking contact or a government official that the request is legitimate.
  5. Teach your children--and yourself. Knowledge is power, and that power can be used to protect your deposits. National Consumer Protection Week encourages parents to teach their children about fundamental financial concepts. While you're at it, try to teach yourself as well--the more you know about your rights as a consumer, the better protected you'll be.

Throughout the year, MoneyRates.com offers advice on how to improve your savings rates--but we know that those savings are not worth anything if your money isn't secure. By following the FTC's tips, not just during National Consumer Protection Week, but throughout the year, your savings account should be healthy and safe.

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