Many financial institutions are allowing consumers to use their smartphones to check account balances, transfer funds between accounts, make payments, and conduct practically any other banking activities that can be done on a computer. While mobile banking can provide convenience and allow you to keep on top of your accounts even when you’re on the go, you should take precautions.
Ask your bank about the mobile banking services it offers and how much they may cost. Some financial institutions are allowing smartphone users to snap a photo of a check and deposit the amount right into their account, without having to enter a bank branch or use an ATM. Also, consumers can make person-to-person payments for situations such as splitting the bill for dinner with friends.
Some consumers also arrange with their bank to send them text alerts warning about low balances, an overdrawn account or unauthorized transactions.
Understand your potential liability for unauthorized transactions. “While you’ll generally be protected by the same consumer laws that would apply to your other banking transactions, it’s important to read the disclosures your bank provides about liability for unauthorized transactions and understand what terms apply to your transactions,” said Elizabeth Khalil, a Senior Policy Analyst in the FDIC’s Division of Depositor and Consumer Protection
Also be aware that the funds you place on a prepaid card may or may not be protected by FDIC insurance if the bank that holds the money (for you and other customers) were to fail. If you have questions, call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342).
As with any activity conducted online, keep security in mind. Protect your mobile device — not just your online account — with a password that is hard for others to guess. Don’t lend your smartphone to others. Know what to do if you lose your smartphone, such as whether you can remotely delete personal information such as your account logins and contact information for friends and relatives. Quickly report any unauthorized transactions or other suspicious activity.
Originally published in FDIC’s Consumer News