How to Stay Financially Safe in a Digital World

The Department of Homeland Security and the National Cyber Security Alliance have named October as National Cyber Security Awareness Month in order to educate American consumers about potential digital threats and how they can protect themselves. In light of growing concerns in the U.S. related to identity theft, fraud and stolen personal information, financial companies are increasing their efforts to address cyber-attacks. Because no amount of security is 100 percent effective, American consumers must also play a part in their protection, especially when personal finances are involved

Computers, smart phones and other internet-enabled mobile devices are the primary vehicles we use to communicate and exchange information. Although this exposes us to potential cyber security risks, there are ways to limit the negative impact of a security breach.

Generally speaking, the following steps can significantly reduce your cyber security risks:

  • Set strong passwords with letters, numbers and unique characters when possible
  • When sharing personal information online, ensure the website uses encryption technology such as Secure Sockets Layer (SSL) technology
  • Verify a website's URL: malicious sites sometimes use a variation of popular website URLs with the intent of misleading consumers
  • Keep your operating system, essential software and anti-virus software up to date
  • Be suspicious of emails asking for your personally identifiable information. Most, if not all reputable companies will have you securely log in to their site before validating personal information, rather than in an email.

Financially speaking, one of the easiest things you can do to protect yourself is to monitor your credit, using sites like or If you notice a significant drop in your score or feel your score is low for inexplicable reasons, it could be a sign of potential fraud. Online tools are available to assist in consistent monitoring and can alert you of suspicious activity.

When it comes to online financial transactions, be prudent in verifying the source of your communications. Be wary of upfront fees, and if something seems suspicious, pick up the phone. Never provide any bank account information prior to completing a full loan application. Reputable institutions should have ratings and reviews, as well as a contact number should you run into any questions or concerns.

Another way to protect yourself is to consider using a credit card as opposed to a debit card. Credit cards provide more protection in most cases when they are lost or stolen. As long as loss, theft, or unknown purchases are reported in a timely manner, the cardholder's liability for any fraudulent expenditures is capped at $50.00. With debit cards, an unauthorized user could empty your bank account, and you may have to wait up to two weeks for reimbursement.

Credit cards are now becoming safer in the U.S. as chip-enabled credit cards will now be the standard for consumers and business owners. Unlike old magnetic strips, the new chips, called EMV, which stands for Europay, MasterCard, Visa, creates a unique code for each transaction, making it difficult for criminals to duplicate consumer information and counterfeit cards.

For small business owners, this is important. If terminals are not upgraded to be EMV ready, you may have to accept liability for any losses associated with fraud when an EMV card is swiped. Although magnetic stripe cards will still be accepted, businesses will sooner or later have to upgrade or potentially face increasing losses. For those small business owners who don't have the cash to upgrade, a small business loan may help with the transition costs.

For consumers, while EMV cards are safer, it's still not a foolproof solution against fraud. Check your accounts frequently for unauthorized activity and inform your financial institution of any suspicious activity.

If you are the victim of a computer scam, the FBI reminds consumers that the best way to report Internet-related crimes -- which often involve false or fraudulent claims to consumers -- is to file a complaint with the Internet Crime Complaint Center (IC3).