Online Banking
Directions: Read the article on Online Banking and completethefollowingnotetakingguide.
NameDate
OnlineBanking-
Class
Consumers can:
Consumers can:
Consumers can:
Three advantagesofonlinebankinginclude
1.
2.
3.
Three disadvantagesofonlinebankinginclude
1.
2.
3.
OnlineBillPayment—
Whatisoneexampleofacompanythatuses onlinebillpayment?
Whataretwoimportant financialaspectsof onlinebillpayment?
1.
2.
Nametwowaystodeterminesecurity
1.
2.
Whatshouldneverbesentthrough email?
1.
2.
The FederalReserveBankofChicagosuggeststhefollowingforconsumerprotection: Passwordsshouldbeacombination of______and
______.
Changepasswords oncea______.
Keepall______andcomparethemtobankstatements monthly.
Logoutofbankaccounts______after youfinishworking
RecurringPayment—
Oneadvantageofrecurringpayment is…
RegulationE—
Thistransfermustbeconductedwith thepurposeofdoingwhat?
PrivacyPolicy—OptingOut—
Online Banking
Name
Date
Class
Directions:Matchthefollowingtermswiththestatementsbelow.Eachquestionisworth1point.
1.Alsoknownasinternetbanking.Allowsconsumersto completetransactionswith wirelesstechnology.
2.Aconsumermayapproveanautomaticpaymenttobe processedforaspecificamount onaspecificdate.
3.Allowsconsumerstosendmoneyfromoneaccountto avendor.
A.RecurringPayment
B.PrivacyPolicy
C.RegulationE
D.OnlineBanking
E.OnlinePayment
4.This outlines howaconsumer’sinformationwillbe usedandprotected.
5.This coversallelectronicfundtransfers.
Directions:Readthefollowing questionsand fillintheblankwith ashortanswer.Eachquestionisworth
3points.
6. Itisnotsafetosend , ,or
throughanemailaccount.
7. The FederalReserveBankofChicago suggeststhefollowingtokeepconsumerssafe:
1.
2.
3.
8. Personalinformationthatissharedwithotherinstitutionscanbelimited iftheconsumerdecides to
.
OnlineBanking
Family Economics and Financial Education
OnlineBanking
Everythingintheworldisbecomingautomated,creatingfaster,easier, andmoreconvenientmethodsforconsumerstomanagetheirmoney. Includedintheautomationmovementisthebankingindustrythrough theemergenceofonlinebanking.Onlinebanking,alsoknown asinternet banking,allowsconsumerstocompletetransactionswiththeir
bankfrom apersonalcomputer (PC) onasecurewebsiteorthroughother wirelesstechnology,suchasapersonaldigitalassistant(PDA)orcellular phone.Thistypeofbankingallowsconsumerstoaccessaccount informationandstatements,transferfunds,managebills,andapplyfor loansandmortgages.Depositoryinstitutionsareoffering servicessuchas electronicstatementstodecreasethecostofpaperandpostage.
Consumers benefitfrombeingabletostore allstatementsonlineinstead ofkeepingapapercopyoftheirmostrecenttransactionsandbill payments.
Onlinebanking,also known asinternet
banking,allows
consumerstocomplete transactionswith
wirelesstechnology
Electronicbillpayingallowsconsumerstosend
moneyfromoneaccounttoavendor.
Online Bill Payment
Acommonfeatureofonlinebankingsystemsis onlinebillpayment.Onlinebillpaymentallowsconsumerstosend moneyfromoneaccounttoavendor.Thepaymentisusuallypreformedelectronicallyinrealtime. Ifapaymentismade today,thevendormayreceivethepaymenttodayaswell.However,aconsumer needstofindoutthepolicyofthevendor andbanktoknowwhenthepaymentwillactuallybeprocessed.Someinstitutions maytakeoneormorebusinessdays
fortheactualtransactiontooccur.Examplesofcompaniesthatimplementonlinebillingincludebutarenotlimitedto:
Retailer banks
Creditcardcompanies
Insurancecompanies
Energyandutilitycompanies
Healthcareproviders
Transportation companies
Educationalinstitutions
Onlinebillpaymentmayoccurinmultipleways.Acustomermayeitherworkdirectlywiththedepositoryinstitutionor withthe companytowhichmoneyisowed.Whenworkingdirectlywithadepositoryinstitution,the customermayorder thatanautomaticpaymentbemadetospecificcompaniesonadesignateddate. Or,thecustomermaygoontohis orher depositoryinstitution’swebsitetorequestthataone-time paymentbemadeelectronically toaspecificpayee.Ifworking directlythroughacompany,customerswould gotothefirm’swebsiteandentertheirdepositoryinstitutionaccount informationtoauthorizeanonlinepayment.
©FamilyEconomicsFinancialEducation—May2010—FinancialInstituionUnit—OnlineBanking—Page1
FundedbyagrantfromTakeChargeAmerica,Inc.totheNortonSchoolofFamily andConsumer SciencesTakeChargeAmericaInstituteatTheUniversityofArizona
Determine Security
Whenusingonlinebanking,oneoftheimportant safeguardstowatchforistodetermineifthedepository institution’sorcompany’sUniformResourceLocator (URL)endswithan“s”;forexample, The“s”indicatesthewebsiteis securefrom potentialonlinetheft.Inadditiontothat,a consumercanlocateaclosedpadlockinthebottomright handcorneroftheirwebsitebrowsertoindicatethatthe websitetheyaremakingtransactionsthrough islocked. It isadvisednottoauthorizepaymentthroughanemail account.Instead,itisgenerallypreferredtogodirectlyto thecompany’swebsite. E-mailaccountsarenot
considered “secure.” Becauseofthis,sendingsocial securitynumbers,bankaccountnumbers,orPIN numbersthroughe-mailisnota safepracticeandcanlead
toidentitytheft.Eventhough thesethreatsexistthereare waystoprotectfundsevenwhenbankingonline. The FederalReserveBankofChicagomakesthefollowing suggestionsforconsumerprotection.1
Anypasswordscreatedshouldbecombinationsof letters,numbers,andcharacterstodecreasethe
chanceofanindividualguessingthecorrectpassword. Apasswordhelpstosetupan accountwith aretailer orbusiness.After youraccountissetupyour passwordwillworkasthekeytomanagingand makingpurchaseswithyouraccount.
Changepasswordsatleastmonthly.
Keepreceiptsandcheckdebitandcreditcard
statementscarefullyandfrequentlyforany
unauthorizedor incorrectcharges.
Whenapersonisfinishedworkingwithanybanking sites,he orsheshouldlogoutimmediately.
Ifaconsumer sensesanyproblemsorhasanyquestions, directcontactwith abankshouldbemadeimmediately.
Consumer Protection
Recurring Payment
Inadditiontobeingabletopaybillsonline, consumerscansetpreferencessuchasarecurringbill payment.Recurringpaymentis an advantagefor consumers. Billsaresettobepaidonthedue dateor apreviousdateindicatedbytheconsumer.The
paymentwilloccurautomaticallyeachmonthwithout writingoutacheck.However, itistheconsumer’s responsibilitytoverifythathisorheraccounthas sufficientfundstocovertheexpenseofthepayment. Depositoryinstitutionshelptoincreaseconvenience bynotrequiringconsumerstoenterpersonal informationeachtimetheymakea
transaction.
Regulation E
Personalinformationaboutmanyaspectsofthelives ofindividualsisroutinely gatheredandstoredonline, whichinturncausesanincreased threatoffraud.
The FederalReserveestablishedRegulationE, ElectronicFundTransfers,tocombatthesecurity issues ofonlinebanking.Regulation Ecoversall electronicfundtransfersincludingtransfersoccurring throughanelectronicterminal,computer,telephone, ormagnetictape.Thetransfermustbeconductedfor the purposeofauthorizingadepositoryinstitutionto debitorcreditaconsumer’saccount.2Ifaconsumer feelsthat hisorherfunds havebeenaccessedwithout permission,itisbesttoreporttheproblem immediatelytothedepositoryinstitution involvedby eitherwriting,callingorvisitinginperson.
Inadditiontopasswordsandaccountinformation,onlinebankingalsoincludesanabundantamountofpersonal informationtobedivulged.Depositoryinstitutionsarerequiredtoprovidecustomerswith acopyoftheprivacypolicy. Adepositoryinstitution’sprivacypolicyoutlineshowaconsumer’s informationwillbeusedandprotected. Ifa consumeris nothappywith adepositoryinstitution’s privacypolicy,the consumerhastheright toinstructadepository institutiontoauthorizethe sharingoflimitedpersonalinformation.Inorderforthistooccuraconsumershould chooseto“optout.”Optingoutofaninstitution’s privacypolicylimitspersonalinformationthatcanbesharedwith outside entities. Consumersfindthisimportanttohavecontroloverwhatindividualinformation issharedwith whom.
©FamilyEconomicsFinancialEducation—May2010—FinancialInstituionUnit—OnlineBanking—Page2
FundedbyagrantfromTakeChargeAmerica,Inc.totheNortonSchoolofFamily andConsumer SciencesTakeChargeAmericaInstituteatTheUniversityofArizona