Security risks online and off are at a peak in recent years. Many people have been concerned to do any business, such as banking, online because they have a large fear of frauds and scam artists. On the reverse of that, many others will look at any offer that seems remotely legit and think that it is fine to disclose financial information. The reality is, just like in the offline world, the online one has it's share of scams and top of the line business offers. It is up to you, the consumer, to verify that you are working with a company that is indeed legitimate.
Here is a good list of online places you might want to avoid when doing your banking and other financial accounts online:
Unacceptable Charges and Fees
You should follow your gut when it comes to fees associated with opening a new account. If you find that any company charges fees for something that is normally free or if the fees being charged seem way too high, your instinct is probably correct. Key to not falling for a trap – shop around. See what several companies are charging for the same services. There are likely many companies that are legitimate where fees are either not there or at least reasonable.
Interest Rates
There has been a lot of commotion about interest rates being raised for seemingly no reason in the credit card industry. A good measure for comparison is any rate over 20% should throw up a red flag. You may want to keep shopping for more reasonable rates, especially if your credit is very good.
Less of a Return
When you have a savings account online, you can typically earn more of a percentage than you would at your home bank. If you are interested in opening a high-yield savings or checking account but the return percentage seems a bit low, look for other companies that have higher interest percentages for your return. Don't commit to any one company until you have comparison shopped.
Offshore Or Uninsured Companies
While it is smart to shop around for the best situation for your finances, you also need to be sure that any accounts you plan to open are done so with a reputable company. Those companies that offer deals that seem too good to be true usually are. Avoid companies that do not have insurance by the FDIC or those companies that are headquartered outside of the country. In the event something happens, you can end up losing all of your money because you have no protection.
Quality of Customer Service
Regardless of whether or not you are conducting all of your business online, you still need to know you can contact customer support by phone if needed. See if the company you are contemplating using answers their phones or email with a real person. Evaluating the customer service response early can help you know what would happen in the event you do need support.
It's never a good idea to play around with your money so you always need to stay on top of where you are putting it. Don't accept any offer that comes your way without first investigating it thoroughly. Check in with the Better Business Bureau if you have doubts or ask friends for honest referrals of places they have put their money. Online banking can be as safe as you make it. You don't necessarily have to be afraid of it but you certainly do have to make sure you check things out well before making any commitments. (Elizabeth Williams, Editor-in-Chief for CreditCardFlyers.com)
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