Banking via Internet calls for caution on part of users

Online banking is growing in popularity, with nearly 23 million Americans expected to pay their bills and access their financial accounts on line by 2004, according to a news release from the Better Business Bureau. The Internet offers the potential for safe, convenient new ways to shop for financial services and conduct banking business; however, the BBB said, safe banking online involves making wise decisions that will avoid costly surprises or scams.

When selecting a traditional bank or an online bank that has no physical offices, potential customers should make sure that it is legitimate and that deposits are federally insured. The Better Business Bureau, along with the Federal Deposit Insurance Corporation offer the following tips to those considering banking over the Internet:

Read key information about the bank posted on its Web site. Most bank Web sites have an "About Us" or similar section that describes the institution. Look for a brief history of the bank, the official name and physical address of the bank's headquarters.

Verify the bank's insurance status. Look for the familiar FDIC logo or the words "Member FDIC" or "FDIC Insured" on the Web site. Keep in mind that not all banks operating on the Internet are insured by the FDIC. Many banks that are not are chartered overseas. If a customer chooses a bank chartered overseas, it is important to know that the FDIC may not insure deposits.

For insurance purposes, be aware that a bank may use different names for its online and traditional services; this does not mean the customer is dealing with separate banks. This means, for example, that to determine the bank's maximum FDIC insurance coverage, deposits at the parent bank will be added together with those at the separately named bank Web site and will be insured for up to the maximum amount covered for one bank.

Find out about online fees. Read the fine print. "Free" may mean unlimited access to an account, or it may mean for a certain number of sessions or transactions, after which fees are incurred. Compare all online fees to any off-line account fees.

Check to see what type of customer support is offered. Look for a customer support telephone number or e-mail address on the site, in case of a problem or question.

Be sure the Web site is secure. Look for these two clues: 1. In the address window of the browser, the first part of the bank's URL changes from http:// to https://; and 2. a lock or key appears in the lower corner of the Web page.