This just in: your bank account is not perfectly safe against hackers. According to one article from the Financial Times, direct attacks on corporate bank accounts are on the rise. For years, cyber-criminals have been content stealing credit card numbers from hapless victims online, a crime that, while annoying for the individuals involved, wasn’t particularly financially damaging thanks to the limited liability theft protection credit cards possess. But criminals are getting bolder and have begun launching more direct, and damaging, attacks directly on your online bank and brokerage accounts. Should you be worried?
Are You Protected?
Here’s the $64,000 question: if a cracker breaks into your online savings account and somehow manages to separate you from your funds, is the bank on the hook for the theft? Are you? In most cases, it’s the bank. But there are far too many gray areas for my liking.
Many (if not most) banks have policies regarding this type of thing. Here is Bank of America’s online banking security guarantee, for example. The policy promises $0 liability provided you live up to your end of the bargain. Your end of the bargain, as defined by Bank Of America, is constituted by the following:
- Diligently reviewing your account statement – If an obvious error pops up, you’re expected to be paying enough attention to catch it and notify the bank within 60 days. This does not seem reasonable to me, since I shouldn’t be held liable for Bank of America’s mistake regardless of how much time has passed. That said, if I haven’t noticed it within 60 days, I probably never will, so it’s probably a wash. In practice, a court would probably order Bank of America to reimburse you anyway so long as you could prove the security breach was on their end and not yours (i.e. you didn’t willfully give your password to a Nigerian scammer).
- Keep your login info private – If you share your username and password with somebody, all transactions they make are considered to be authorized by you. This sounds reasonable to me. Don’t share your info with anybody you don’t absolutely trust and even then, pay extra attention to your statement.
- Don’t leave your computer unattended while logged in – Again, this seems reasonable. If you’re stupid enough to leave your bank account logged on unattented in a public place, you deserve what you get.
With the questionable exception of the first point, Bank of America’s policy is simple, easy to understand, and easy to implement by following commonsense guidelines. In practice, short of leaving your computer logged into your bank account unattended in public, you have very little personal liability.
What If It’s The Bank’s Fault?
What about the flip side of the coin? If a ne’er-do-well script kiddie figures out how to hack into the Bank’s internal computer system, the bank and bank alone is considered the victim of a crime. There would be no need for the bank to reimburse your account since the money stolen wouldn’t have been yours anyway, but the banks. In case the magnitude of theft were catastrophic (it’s possible, I suppose), the FDIC would step in same as always.
What Can You Do, Just To Be Safe?
Better safe than sorry. Here’s what you can do to minimize your chances of being victimized.
- Don’t give out your password – To anyone. Ever. For any reason.
- Use a strong password – Don’t make your password your cat’s name or anything like that. A random string of letters, numbers, and characters is best. Use the Password Strength Checker to find out how strong your password is. If you’re below 50%, you should change your passwords immediately.
- Log out after every session – Be sure to log out of your account manually after every session. Most sites will automatically do this for you after a certain period of activity, but there’s no reason to take chances, especially since it only takes a few seconds. Do this even if you check your account at home and nobody else is around.
- Don’t use the same password for every account - I know this one is annoying, especially since your password is a random string of letters, numbers, and special characters (right? right?) but if you can memorize an extra random string or two, your risk of being cleaned out will decrease dramatically.
- Don’t log into your account on non-secure computers – Only log in at home and perhaps at work, where you can be reasonably sure the computer you’re on is secure. Internet cafes are out.
- Encrypt your wireless connection! – Broadcasting an unencrypted wireless connection is asking for trouble. There are no fewer than 2 unsecured networks within range of my laptop as I’m typing this. If your wireless traffic is unencrypted, it’s much easier to intercept things like passwords and credit card numbers. Either encrypt your wireless or use a cable, please.
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