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How to avoid phony bank websites

October 31, 2011

By Lynnette Khalfani-Cox | Money Rates Columnist

Americans consumers are easily tricked by fake banking websites, leaving them at risk of having money stolen or personal financial data misused by fraudsters, according to a recent survey.

The Melbourne IT Group polled 1,007 U.S. adults to assess their online behavior and check how they verify the authenticity of bank websites.

The results were alarming:

  • 47 percent said they merely evaluate the look and colors of a website to decide if it's legitimate.
  • Only 45 percent said they verify that the web address (URL) is correct.
  • 6 percent of respondents admitted they don't check anything.

One big problem unearthed in the study: too many people simply judge the appearance and feel of a site to determine if it's authentic. But scammers are often technologically savvy and able to create websites that look very much like a real bank site.

And once they've created a fake web site, the next step is usually to send out phishing emails intended to lure unsuspecting consumers.

"Be especially careful when you receive a request for your information," says Better Business Bureau spokeswoman Katherine Hutt. "Phishing e-mails can look very much like the real thing, but don't be fooled. Your bank will never contact you by e-mail to ask you to confirm your identification, account number or password."

Nevertheless, untold numbers of Americans have fallen victim to online banking scams. A number of Wells Fargo customers were recently duped by a phishing scam that asked customers to complete an online form that sought their personal banking information.

In response, Wells Fargo posted a statement on its website that read: "Wells Fargo is investigating a fraudulent email being circulated to Wells Fargo customers and non-customers. This type of fraudulent email is an industry-wide issue that has affected a number of financial institutions and online businesses in recent months."

Fortunately, there are safeguards you can take to avoid falling victim to financial predators online.

Know the signs of a scam

For starters, look for a padlock security symbol in the address bar of your browser when you access a secure bank website--but recognize that these symbols can be manipulated by criminals too.

Also double-check the spelling of the bank website to ensure that it's correct (cross-check the proper bank URL through a search engine if you're unsure.) And triple-check that there is an "s" at the end of the https in the website's URL, which indicates that the connection is secure and can't be intercepted by scammers.

"Online banking can be one of the most convenient tools available to consumers, but it's imperative that you protect your data to avoid being a victim of identity theft," said Hutt. "Make sure you use strong passwords and follow any suggestions from your bank for additional security measures."

Hutt also recommends that consumers memorize their passwords and never store them in their wallet, on their phone or anyplace else that someone can easily access them.

"Check your online statement frequently to see if there is any activity you don't recognize, and call your bank immediately if there is," Hutt said.

Don't act too quickly

Cyber-criminals often like to create a sense of urgency in their scams. They'll often state that your account will be closed or that you'll lose online access to your checking or savings accounts if you don't reply by a given date. But as Hutt indicated, banks simply don't make those kinds of demands. So take time to carefully evaluate your online correspondences and don't click any links you're unsure about.

TransUnion, one of the major credit reporting agencies, recently issued an alert warning consumers about fraud and identity-theft scams in which con artists have asked people for their credit card numbers.

"Never give out your personal information over the phone or Internet unless it is to a trusted source or you initiated the call or transaction," said TransUnion spokesman John Branham.

Also, if you get a suspicious request to divulge your banking or credit information, TransUnion officials suggest that you report it to your local bank or credit card provider by calling the phone number on the back of your credit card or statement.


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