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Risky Business?
(Monitor, The (McAllen, TX) (KRT) Via Thomson Dialog NewsEdge) Feb. 11--McALLEN -- Loaded up with an iPod, a Palm Pilot, a cell phone and a laptop, Philip Galindo is the prototypical modern consumer. He shops online, talks online, bids online, and for the last three years he has banked online.
As such, his credit card number, Social Security number and various pieces of identifying information are held by Web sites and financial institutions, the security of which has fallen under recent scrutiny.
"Nothing's foolproof. If someone can build it, someone can break into it," said the 23-year-old college student.
"But there's security codes and signatures. There's ways to verify. Plus with banking online, you can check your account anytime, so if someone rips you off you can find out about it."
Online banking, whereby a person can check their loan balance, pay bills and make transfers between accounts without leaving their house, is one of the fastest growing segments of the banking industry. The American Bankers Association estimates that 39 percent of customers now pay bills on line, a number that more than doubled over the past five years.
"Online banking offers convenience, and the number one thing people look for when shopping for a bank is convenience," said ABA spokeswoman Terry Mills.
But for all its ease, banks' online services and a host of other networks have been the victims of security breaches. The Privacy Rights Clearinghouse, a consumer advocacy group based in California, reports that 109 computer networks, including those of municipal governments, universities and banks, have been breached since February 2005.
Perhaps the most famous breach came in 2004, when $90,000 was illegally transferred out of the bank account of a Miami businessman to a bank in Latvia, where $20,000 was promptly withdrawn by unknown individuals, believed to be members of a hacking ring.
But according to Jim Bruene, editor of Online Banking Report, an industry newsletter, such instances are extremely rare.
"There's only a couple instances of a bank being hacked into that I can think of over the last 10 years. Most of the cases involve a laptop being stolen and databases getting compromised, not a network actually being breached," he said.
"Banks have been involved in electronic money transfers for 20 to 30 years, so this is nothing new to them."
As for a person's personal information being obtained through a misplaced laptop, he said even with a bank account number and password a criminal would have a hard time using that information to remove money from a person's bank account. While more elaborate methods would allow a criminal to do so, Bruene said government regulations require banks to pay back any loss over $50.
"Of course there's the ick factor of someone getting your personal details, but it's not that easy to get the money out of your bank account. Even if you know someone's user name and password, you can't just transfer the money out," he said.
"Persons that bank online are likely to be more protected. The advantage of being able to track your account more frequently outweighs the miniscule risk that someone might hack into your account."
While online banking is becoming the standard for many across the United States, one area where it hasn't caught on as fast is here in the Rio Grande Valley.
Of Chase Bank's 7.9 million checking account holders, 4.2 million bank online, a 35 percent increase over last year, said spokesman Greg Hassel. While the international bank did not release regional data, Rio Bank, a local financial institution with four branches in the Rio Grande Valley reports that only 20 percent of its customers bank online.
"Lots of people are still using telephone banking," said Rosie Hinojosa, Rio Bank spokeswoman.
"People here are just more comfortable getting on the phone than on a PC. Or maybe they just don't have Internet access."
While they might not be the norm, customers like Galindo relish the ease with which they can manage their finances online.
"I can keep track of my payment and integrate my accounts with money management software … when I'm at school in San Antonio I check it every day," he said.
"As long as the technology keeps improving and you have access to the Internet, and with options of accessing your account through your cellular phone or laptop you're limitless."
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James Osborne covers PSJA and general assignments for The Monitor. You can reach him at (956) 683-4428.
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