Ed VanHoose is the Digital Communications Administrator/IT Manager for the Association of Illinois Electric Cooperatives
The check’s in the e-mail
With all the talk these days about identity theft, and the continual worry that transacting business online is unwise, many people are questioning whether or not they should be involved in online banking. This issue of Powered Up will examine some of the benefits in using online banking.
According to the Federal Trade Commission (FTC) electronic banking, also known as electronic fund transfer (EFT) uses computer and electronic technology as a substitute for checks and other paper transactions. EFTs are initiated through devices like cards or codes that let you, or those you authorize, access your account. Many financial institutions use ATM or debit cards and Personal Identification Numbers (PINs) for this purpose. Some use other forms of debit cards such as those that require, at the most, your signature or a scan.
Most people are already familiar with ATM cards and/or debit cards that act like credit cards, but there is some confusion about the difference between direct deposit, automatic withdrawal and electronic bill pay.
Direct deposit lets you authorize specific deposits, such as paychecks and Social Security checks, to your account on a regular basis. Many employers now offer direct deposit. With it, you may find that you receive your wages a day or two early because of being enrolled in direct deposit.
Automatic withdrawal or direct debit is when you also may pre-authorize an automatic payment of recurring bills, such as insurance premiums, mortgages and utility bills. Be cautious before you pre-authorize direct withdrawals to pay sellers or companies with whom you are unfamiliar; funds from your bank account could be withdrawn fraudulently. In fact, many consumers are moving entirely away from automatic withdrawals to an electronic bill pay system.
Electronic bill pay is a relatively new service now offered by most banking institutions. To use it, you will probably have to sign up for personal computer banking, otherwise known as online banking or electronic banking. Personal computer banking lets you use your computer to view your account balance, request transfers between accounts, and pay bills electronically.
If you decide to use an EFT of any kind, then make sure you follow these two basic financial safety rules:
1. Keep and compare receipts for all types of EFT transactions so you can find errors or unauthorized transfers and report them.
2. Make sure you know and trust a merchant or other company before you share any bank account information or pre-authorize debits to your account.
Last, be sure to know where to go if you have a problem. Much of the information contained in this article comes from the FTC. Their site (www.ftc.gov) will help you stay safe as you venture into the electronic financial world.
FTC Facts For Consumers:
Before you contract for EFT services or make your first electronic transfer, the institution must tell you the following information in a form you can keep:
- A summary of your liability for unauthorized transfers.
- The telephone number and address of the person to be notified if you think an unauthorized transfer has been or may be made, a statement of the institution’s “business days” (which is, generally, the days the institution is open to the public for normal business), and the number of days you have to report suspected unauthorized transfers.
- The type of transfers you can make, fees for transfers, and any limits on the frequency and dollar amount of transfers.
- A summary of your right to receive documentation of transfers, to stop payment on a pre-authorized transfer, and the procedures to follow to stop payment.
- A notice describing the procedures to follow to report an error on a receipt for an EFT or your periodic statement, to request more information about a transfer listed on your statement, and how long you have to make your report.
- A summary of the institution’s liability to you if it fails to make or stop certain transactions.
- Circumstances under which the institution will disclose information to third parties concerning your account.
Ed VanHoose is the Digital Communications Administrator/IT Manager for the Association of Illinois Electric Cooperatives in Springfield. He is a specialist in the IT field with over 12 years of experience working in leadership roles for technology based projects in Illinois and Missouri.