A CCC.com Blog SPECIAL REPORT
by Jimmy Marks (with special thanks to Rob Banker)
I'm a fan of Mint, myself. Not mint as in gum or green tea - Mint.com, a site to help people like me figure out where the heck my money's going. I like it, I like the info, I like the "Web 2.0 feel" of it all. I'm not the only one - Time magazine online voted it one of its top websites of 2008 and people are jumping on every day to get the most of their money and get advice at their fingertips. That in mind, I was interested to read this article on CUNA News Now about banking in the world of Web 2.0.
Wait...what do you MEAN, what's Web 2.0? I thought we'd been talking about this in earlier posts. Since I'm too lazy to bother giving out a quiz on this, I'll just let Wikipedia do it for me.
How do you start using Web 2.0? Can you click on the comments section below the post and leave your thoughts about our story? Then you've just used Web 2.0. Congratulations.
Now, back to the action.
Web 2.0 has changed the way we "do" the Internet. We get our news delivered to us through RSS readers and text messages. We can interact with people we lost touch with ages ago and keep tabs on where they've been and where they're going. We got the "people" end of Web 2.0 in order. Thus, we put our good effort into "things". Just about anything you buy on eBay, Amazon.com, or cnet.com is tied in with the credibility of the seller, the recommendations of the website itself and the recommendations of other users. If you do buy something you like, you can praise it online and the website will (most likely) point you to other things you might ALSO like to buy.
So, we used Web 2.0 to make people and things easier to find, enjoy, and manage. What about money? Sites like E*Trade have been around for a dog's age online [ note -- that's a down-south way of saying "a long time". Actual ages of dogs may vary.] and have been offering stock tips and investment portfolios. But what about your everyday, in-pocket folding cash? Who's looking out for you there?
Mint.com, Wesabe.com and Banzai.com are a Web 2.0 approach to money. You give them information about the money you have, they give you information on what's best to do with it. It's called Personal Financial Management (PFM): they track your spending patterns and tell you what you can do to get the most out of what you've earned...and what you can do to earn more. What's not to love about something like this?
The aforementioned article from CUNA points to research done by the TowerGroup in Needham, MA that suggests sites like Wesabe and Mint may be a new target for Phishing scams and identity thieves. The TowerGroup findings give credit to PFM sites, saying that their new ideas and tools for money management can enhance online banking and make members smarter about spending and investing. Precaution is the tone of the report, however; with more people using PFMs comes more attention paid by those who would try to take user info and do wrong with it. The more popular a financial site, the tougher the defense HAS to be [note -- it's true. According to PhishTank.com, the top three targets of Phishing scams are PayPal, Bank of America, and eBay].
There's no reason not to be leary when dealing with money online. Identity theft happens every day to every type of person - you don't have to be rich, you don't have to be stupid, you just have to have a name and a number. Not theft, mind you...no one's saying using a PFM site will let someone drain your bank account. We're talking Identity Theft- taking your name and personal information and using it to create credit lines and make purchases with you waiting unaware. Phishing scams are a constant threat to people who bank online and the numbers reflect a simple principle of business:
Caveat Emptor - buyer beware.
The findings of the TowerGroup study suggest that the Federal Trade Commission should look at the matter closely. Their argument is that a better way to bank is possible, with people able to see their money in a new way; it's imperative, then, that PFMs have bank-level security to go with sharp, pleasing interfaces. The major PFMs counter that on their Privacy/Security page by saying that there isn't really any information for a "hacker" to steal - they don't keep your account numbers, your credit card numbers, or any financial institution passwords. They also don't care to have your name or address or ANY information that can tie you to your money aside from your e-mail account - the truth is, sites like these don't move or spend any money for you. They just give you information about your habits and patterns and, believe it or not, inform you the moment something seems funny (or is it, "phishy"?) in your account. Can your bank do that? Yes, actually. But the benefit of these new PFMs is that they can track ALL your accounts at once and see what's shaking. So, the question: better, or worse? Better to have the capability to keep all the info in one place, or worse to make it a possible target?
It seems that, yet again, the moral of the story is simple: don't give away what you don't want known. It's the one skeleton in the Web 2.0 closet - the idea that there IS such a thing as too much information. You wouldn't put pictures of yourself on Facebook that could get you thrown in jail (well, some of us would...like this guy). Likewise, if you don't want your info stolen, you must must MUST play it close to your chest and take everything - Emails, text messages, inquiries online and off - with a grain of salt. Never give away a password, never assume you're 100% safe online, and don't avoid going to regular banking websites just to check on things yourself...and of course, there's always the financial institution itself. Those buildings with the happy helpful tellers are there for a reason.
Don't like my answer on how to avoid getting "info-jacked"? Rob's got a hum-dinger of an answer for you in the posts to come.
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Jimmy Marks has begun a new series of articles called "20 & Change" - want to know about Gen-Y and the changing face of youth investing? Visit the DigitalMailer blog and click on "20 & Change".
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