How your bank protects you

20 February 2015

[bw_lead]Your savings are under threat from hackers.How your bank protects you  It sounds dramatic, but every day criminals from around the world are attempting to steal money from bank customers. They develop new and sophisticated methods to net up to one billion dollars. It?s a race that our banks spend many millions of dollars to keep up with.[/bs_lead]


What do our banks do to protect us?

  • Banks spend millions on computer security.  It?s a necessary cost for them because they?re required to refund customers who have been defrauded through no fault of their own. According to the Australian Federal Police, if you have been a victim of identity crime and your card is still in your possession, you shouldn?t have to pay for anything bought on it without your permission (subject to the terms and conditions of your account). If your card has been reported lost or stolen, you will usually not have to pay, unless it can be shown that you have acted fraudulently or without reasonable care (for example by keeping your PIN number written down with your card). The same applies to any money lost through fraudulent bank transactions.
  • Banks use Secure Socket Layer (SSL) encryption, which gives an added layer of protection when you sign into online services or do anything else in which your personal information could be intercepted.
  • Password security: Banks will often insist that passwords have a minimum length, use both lower and uppercase letters and have a number in them.
  • Your information is encrypted.  That means all information leaving your computer and going to the bank is scrambled.  Encrypted bank websites have some type of closed lock symbol on them at one corner.  The web address will also begin with https://.  The “s” stands for secured. It?s a good idea to check for this “s” this each time you log on because “man in the browser” attacks can redirect users unknowingly to a fake website starting with http://.
  • You?re locked out of online banking if you get your password wrong more than a few times. You will also be subject to timed logoff; if you walk away from your computer without logging off from online banking you?ll be logged out after a certain amount of inactivity.
  • Banks use firewalls so that only authorised users can get in.
  • Some banks use two-factor identification. As well as having to input your user name and password you must answer questions that only you should know the answer to. Some banks require you to use a digipass, which is a small device that generates a unique code every time you log in. Without the digipass you can?t get in.
  • The bank can recognise your device. The bank?s systems know where you?re logging in from. If your account is logged into from an unusual location this can send alarm bells ringing at the bank.


Financial institutions can?t always keep ahead of the fraudsters and if you?ve been sensible about looking after passwords and banking security in general you?ll probably be reimbursed. You can complain to the Banking Ombudsman if you?re not reimbursed and your case will be heard by an independent adjudicator.

Finally, Internet banking is a great tool.  Just take care when you?re using it.


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