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Electronic Funds Transfer Tips for Users

written by: ciel s cantoria•edited by: Elizabeth Wistrom•updated: 7/11/2011

An electronic funds transfer (EFT) is generally considered both secure and safe since they have built-in security features. However, since they are often coursed through different communication mechanisms, it is also important to understand what precautions you need to take to stay safe.

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    How Do EFTs Work?

    If you're wondering how EFTs work, comprehend that even the simplest electronic transaction, like a balance inquiry, passes through a communication mechanism called “Payment Switch", often simply referred to as the “switch". This provides the communication medium between ATMs, cash register units or point-of-sale terminals, e-payment applications and the core banking system. It’s a network of complicated data transfer activities of forwarding request messages and sending back responses, which could give rise to more complex transactions.

    In view of this, it would be best to keep it in mind that accounts with EFT transactions are not a hundred percent safe and can still be susceptible to Internet scams and all sorts of unauthorized manipulations. There are, however certain precautions you can take to secure every e-transaction that you make. .

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    Must Dos

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    • If you are constantly making online purchases or dealing with Internet domains that require you to give certain information about yourself and your account, deal or transact business only with websites that use secure servers. You will know that the website is running under a secure server if the URL starts with https:// instead of just http://. You will also notice a “lock" icon to indicate that the website is using a secure server employing secure protocol.
    • Make it a point to transact large buying and selling deals using banks ‘secured electronic payment systems with SWIFT (Society for Worldwide Interbank Telecommunication), IBAN International Bank Account Numbers) and BIC (Bank Identifier Code) security features. These are all internationally recognized systems of ensuring bank facilitated electronic funds transfer. Banks will not process any wire transfers unless there was cash debited to give effect to the credit. Payments made through PayPal and other similar payment gateways can still be reversed which works well if you are the one making payment. It is quite different though if you are the recipient.
    • Ignore mails, emails, text messages or phone calls about notices to claim implausible windfalls. Unless of course you have participated in lotteries or something similar, but then the best thing to do is to verify this personally with the entity that is holding the contest and provide them with details about your identification personally and outside of the Net.
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    • Ignore emails supposedly coming from your bank, from PayPal or from you credit card service provider informing you that your account with them has been compromised. Usually, this also comes with an official-looking request and forms to fill up wherein you will provide all your personal information. The standard procedure observed in cases where such information is needed is to submit them directly at the secured website or at the bank itself.
    • Avoid downloading freebies like software applications since this is how malware or spyware gets attached to your PC. Spyware can extract information from your computer without your knowing it and can surreptitiously relay your info to the author of the spyware.
    • In case your credit cards, debit cards or ATM cards have been stolen, report the matter immediately to the credit company or to your depository bank to block all future transactions.
    • Make it a point to review your credit reports periodically if you frequently or regularly make purchases via online stores. Particularly if your credit purchases are your most common electronic transactions.Report any unauthorized transactions or cash advances immediately to the credit reporting bureau and to your credit card service provider.
    • Install additional security software if necessary. Some protection features may include those that can detect and block unusual activities going on in your PC.
    • Keep yourself up to date with the latest trends on how cyber crimes are carried out and know the precautionary measures to take.
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    • Don’t click on links appearing on spam mails or avoid opening spam mails in the first place.
    • Don’t be too eager in adding people or sites you don’t know to your social network accounts especially if they keep on furnishing you with links to visit.
    • Don’t leave your online accounts without signing-off to prevent hackers from gaining access to your account.
    • Don’t put a check mark on the "Remember my login and password" box since this can make your account vulnerable to hackers.
    • There are numerous ways that your online accounts can be hacked into by cyber criminals since the think-tanks behind these groups of Internet operators are mostly computer savvy individuals. In fact, even your bank deposit account can be manipulated beyond your control. The best thing for you to do is check your bank statements regularly to determine the propriety of all transactions appearing therein whether or not they involve EFTs.

    The safety measures of you electronic funds transfer accounts and transactions can be 100% effective and efficient only if you handle your account in the most security-conscious manner as possible.

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