Risks of Paying Bills Online

It wasn’t that long ago when most of us would sit down at our desks or kitchen tables, gather all of the bills that accumulated over the course of the month, retrieve our checkbooks and rolls of stamps, and pay our various bills. 

Technology now allows us to pay our monthly bills online.  Automated bill-paying doesn’t even require you to lift a finger, let alone lick a stamp. 

These are the most common ways to pay bills online: 

• Giving each “biller” consent to electronically take money from your bank account one time; 
•  Agreeing to have the biller take money from your account at the same time each month (“recurring debit”); or
• Using the online bill pay system at your bank to send payments out automatically each month.

There certainly are real risks to paying your bills online.  We are all familiar with the term identity theft, and most of us have heard horror stories about people having their entire bank account wiped clean.  Also, sometimes billers will use automatic billing in ways that can cause real problems for consumers.  If you are uncomfortable with technology and remain uneasy about giving “billers” free access to your personal finance information by paying your bills online, please consider the following tips for reducing some of the potential risks of online bill-paying:

1. Per federal law, you always have the right to cancel a recurring payment set-up.  To cancel this you can send a letter to the biller, to your bank, or both.  Also, a biller must always have your written consent to take money from your bank account.
2. Never open or click on a link sent to you in an email by someone you don’t know.  By clicking the link you may be taken to a website that may look like your bank or credit card company, but isn’t.  If you do receive any suspicious emails that appear to be from your bank or credit card company, call them by using the number listed on your credit card or bank account statements.
3. Bookmark your financial institution and credit card company’s websites as favorites in your browser so that one click brings you to their website safely every time.
4. Never trust an email that asks for your personal or account information.  No bank or reputable company is going to send an email asking you to correct your information, validate your identity, reenter your password, etc.
5. Choose passwords for your online banking and credit card accounts that do not include things like your mailing address, telephone number, social security number or date of birth.
6. Change or rotate your personal finance account passwords every few months.
7. Avoid paying bills online with a debit card; use a credit card if possible.  Your liability for unauthorized use and your rights for dealing with errors are generally different for a debit card and a credit card.
8. Do not pay your bills online or disclose personal finance information when using a public computer (e.g. at a public library or hotel).
9. When paying bills online, the web page should always start with “https”, as this shows that it is a secure connection.  Also, look for the padlock icon on the company or bank’s website.  Clicking on the padlock icon will allow you to review the website’s security certificate.
10. Make sure you log out or sign out of your account when you are finished using it.
11. Read your monthly bank and credit card statements promptly and carefully.  If you find unauthorized transactions or errors, contact your bank or credit card company immediately.