Protect your financial information on your cellphone

The Savage Truth

How safe is your financial information on your smartphone or tablet? Whether you're paying bills, checking balances, making purchases or transferring money, you need to take special caution to avoid financial disaster when using your hand-held device.

It's estimated that credit card fraud totaled more than $16 billion worldwide in 2014 and could easily double in the next five years. That's why you're seeing banks introduce new chip cards, which are more fraud resistant. And it's why your bank or card issuer may be sending you text messages questioning unusual transactions.

Even though you are guaranteed against loss from fraudulent use of your cards, we all pay the price. And there's no price to put on the hassle of getting a new card and changing all those automatic payments to your new card number.

Alex Matjanec, cofounder of MyBankTracker.com, a site with more than 1.5 million monthly users, advises the generation that handles most of its finances on its phones to be proactive in protecting financial information.

Here are five steps you should take:

  1. Use the financial institution's mobile app. Don't simply use your browser -- be it Safari or Chrome or any other -- to access your bank's website. Instead, be sure to download the bank or credit card company or brokerage firm app. It will come empowered with an extra degree of security for your inquiries and transactions.
  2. Make sure your smartphone or tablet is secure. Always keep your instrument password-protected, even though this takes an extra few seconds to get you into your phone. Even better than using a numerical password is the fingerprint technology that is available on most new smartphones. If your phone is not protected, a thief can easily access your browser history, getting a head start on identity theft.
  3. Never use public WiFi to access your account! It's OK to access your financial institution from your secured home WiFi access, but don't do it when you're sitting in a coffee shop using its WiFi. Anyone nearby can gain access to all your information and password. It's like opening the door to the vault. If you are near public WiFi, simply turn the WiFi off temporarily and use your secure cellular data to access your account -- or, for that matter, to keep email messages truly private.
  4. Set up two-factor authentication. You've probably received a text from your bank or card issuer if you attempt to access your data from a new computer or phone. They will note that they "don't recognize" the phone and send you a text or email (whichever you have chosen) with a temporary "one-time" passcode that you must copy and insert into the log-in page. What most people don't know is that they can work with their financial institution to require this type of authentication for each financial institution, every time you use the app. You'll find instructions for setting it up in the "settings" section of the app. Or call your bank and ask them to make it a requirement. Similarly, you can set up notifications in your app -- so you will be texted whenever a transaction exceeds a certain amount, or when two withdrawals are made in one day, for example.
  5. Never pre-populate your user name or password in an app. Sure, it saves time if you don't have to type in your username on commonly used apps, but don't do it for financial apps. And surely don't let the app "remember" your password for your bank or credit card account. That's just asking for trouble if you lose your phone.

It's fine to rely on the security of merchants and financial institutions. They spend billions on security each year. But don't let all that security go to waste by making a simple mistake on your end, opening the door to financial fraud and identity theft. It's worth taking the time to do it right. And that's The Savage Truth.

 Terry Savage is a registered investment adviser and the author of four best-selling books, including "The Savage Truth on Money." Terry responds to questions on her blog at TerrySavage.com.

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