Online Bill Payment and Security
Online Bill Payment and Security
Hello,
I would be curious to hear thoughts on how some folks pay bills. I have always been skeptical of providing certain vendors, utilities, etc. with personal banking information, but at the same time I really wonder whether personal data is safer when transactions are handled with paper and stamps. The cost savings is clear when it comes to buying considerable postage. In the end, I would be interested to devise a secure strategy to maybe pay all my bills electronically, but not in a way that exposes too much financial institutional data.
I am sure there are some simple and elegant approaches to this, but I can't seem to wrap my head around it.
I would be curious to hear thoughts on how some folks pay bills. I have always been skeptical of providing certain vendors, utilities, etc. with personal banking information, but at the same time I really wonder whether personal data is safer when transactions are handled with paper and stamps. The cost savings is clear when it comes to buying considerable postage. In the end, I would be interested to devise a secure strategy to maybe pay all my bills electronically, but not in a way that exposes too much financial institutional data.
I am sure there are some simple and elegant approaches to this, but I can't seem to wrap my head around it.
Re: Online Bill Payment and Security
When you send them a check, the routing code and account number are on the check. That is all that is needed for electronic banking as well.jb9 wrote:Hello,
I would be curious to hear thoughts on how some folks pay bills. I have always been skeptical of providing certain vendors, utilities, etc. with personal banking information, but at the same time I really wonder whether personal data is safer when transactions are handled with paper and stamps.
I always wanted to be a procrastinator.
I pay all my bills electronically from my bank to the vendors; I don't let the vendors pull money from my bank. However, what I don't know is if the vendor gets the information in the form:
Payer: Me
My Account with vendor: long number
Amount: $some
From: Big bank
or if the transmission also includes
Payer's bank account: another long number ?
I like to believe that it is the former.
Payer: Me
My Account with vendor: long number
Amount: $some
From: Big bank
or if the transmission also includes
Payer's bank account: another long number ?
I like to believe that it is the former.
Bill pay and credit card usage seem safe to me.
Chaz |
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“Money is better than poverty, if only for financial reasons." Woody Allen |
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We pay rent with a check
Car insurance goes to Mastercard (because they dont accept AMEX) and is paid off monthly
EVERYTHING else (utilities, cable, mobile phone) goes to our rewards AMEX and is paid off monthly
The main way I avoid losing money by doing this is to avoid automatic payment on the CCs. If there is some fraudulent transaction I miss, I don't want that automatically deducted from my checking account. Then I can dispute any transaction I want and the CC companies usually provide their own refund/exchange policy and insurance depending on the purchase.
The point is that I think paying electronically offers you more consumer protections and controls to avoid losing money. Data loss is a little different. You're at the whim of the security policies of those holding your data. As long as your money-controls are in place the potential data loss probably shouldn't pose a major risk.
Car insurance goes to Mastercard (because they dont accept AMEX) and is paid off monthly
EVERYTHING else (utilities, cable, mobile phone) goes to our rewards AMEX and is paid off monthly
The main way I avoid losing money by doing this is to avoid automatic payment on the CCs. If there is some fraudulent transaction I miss, I don't want that automatically deducted from my checking account. Then I can dispute any transaction I want and the CC companies usually provide their own refund/exchange policy and insurance depending on the purchase.
The point is that I think paying electronically offers you more consumer protections and controls to avoid losing money. Data loss is a little different. You're at the whim of the security policies of those holding your data. As long as your money-controls are in place the potential data loss probably shouldn't pose a major risk.
All of my monthly bills are paid via scheduled direct debit or, where they allow, from credit cards. I don't pay them through the bank's pay bill service. I have had no problems and, of course, I am never late.
I also online pay my annual and semi-annual liability, auto, and homeowners insurance via credit card.
Jim
I also online pay my annual and semi-annual liability, auto, and homeowners insurance via credit card.
Jim
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
All my bills have recurring monthly payments setup except credit card and insurance bills. If I can pay with credit it goes on a card otherwise it goes through ACH pulls. Can't imagine getting and paying bills by mail anymore.
-Mortgage
-HOA
-Car loan
-Electric
-Gas
-Internet
-Cell phone
-Credit card #1
-Credit card #2
-Insurance
That would be about $45 in postage a year plus my time. I've practically eliminated the risk of being late on a bill.
Been using this system for about 5 years now and not a single issue. I've had a few fraudulent credit card charges over the years, but those get caught in my daily Mint transaction categorization. Why wait till the end of the month to see what's going on when you can get near real time activity on all of your accounts online.
I find mailing a check to be more risky than online banking. I can't track what happens to the physical check after I drop it in the mail. I can track up to the minute everything that happens electronically with my accounts.
-Mortgage
-HOA
-Car loan
-Electric
-Gas
-Internet
-Cell phone
-Credit card #1
-Credit card #2
-Insurance
That would be about $45 in postage a year plus my time. I've practically eliminated the risk of being late on a bill.
Been using this system for about 5 years now and not a single issue. I've had a few fraudulent credit card charges over the years, but those get caught in my daily Mint transaction categorization. Why wait till the end of the month to see what's going on when you can get near real time activity on all of your accounts online.
I find mailing a check to be more risky than online banking. I can't track what happens to the physical check after I drop it in the mail. I can track up to the minute everything that happens electronically with my accounts.
Go Automatic!
We have had our bills paid automatically every month since 2001, and have never had a problem. We simply open our online banking account and review all the charges to make sure nothing (un) funny is going on.
To get additional information, I just called Lisa at our bank and got the following tips to avoid problems with Automatic Clearing House (ACH) payments.
For all payments that are the same amount each month, set up the automatic transfer with your bank.
For all payments that vary each month (like credit card balances), set those up with recognized institutions (like your local utility company, Phone bills, etc.
Lisa also stated that ACH payments for credit card companies should ALWAYS be set up through the credit card companies. Why? Because if for any reason your bank is late sending out the payment, there can be some nasty late/penalty fees (to us that is anything over $0.00). However, if it is the credit card company that is late pulling the money out, it is their problem and late fees cannot be charged.
We have a great local bank! Not everybody is so lucky.
Jim
To get additional information, I just called Lisa at our bank and got the following tips to avoid problems with Automatic Clearing House (ACH) payments.
For all payments that are the same amount each month, set up the automatic transfer with your bank.
For all payments that vary each month (like credit card balances), set those up with recognized institutions (like your local utility company, Phone bills, etc.
Lisa also stated that ACH payments for credit card companies should ALWAYS be set up through the credit card companies. Why? Because if for any reason your bank is late sending out the payment, there can be some nasty late/penalty fees (to us that is anything over $0.00). However, if it is the credit card company that is late pulling the money out, it is their problem and late fees cannot be charged.
We have a great local bank! Not everybody is so lucky.
Jim
I have a separate credit card JUST for automatic drafts. It seems no matter how careful you are, every few years your credit card gets scammed, and they have to send you a new one--meaing a new CC #. Then you have to notify all your auto-drafts about the new info. So a couple years ago, I opened a credit card JUST for this. It has 8-10 charges a month; the same ones over & over. And since the card is NEVER used anywhere (online or in person), the chance of fraud is close to zero.
I put all recurring charges on credit cards (either the one above, or another one I use). And I charge everything I can to a credit card--every meal, every purchase, online or not. Then I have my credit cards auto-paid from my checking account. I am down to ONE recurring bill a month (the yard guy!), and I use the bank's BillPay service to pay that. I only cut checks for the odd duck--charities, one-offs, etc.
I check my credit card & money accounts (bank, Vanguard, Schwab) every week, online. I review all the charges, checks, activity, etc. Looking for anything funny. And I reconcile every account monthly in Quicken.
I haven't had two problems in twenty years with any of this (random CC fraud aside).
I put all recurring charges on credit cards (either the one above, or another one I use). And I charge everything I can to a credit card--every meal, every purchase, online or not. Then I have my credit cards auto-paid from my checking account. I am down to ONE recurring bill a month (the yard guy!), and I use the bank's BillPay service to pay that. I only cut checks for the odd duck--charities, one-offs, etc.
I check my credit card & money accounts (bank, Vanguard, Schwab) every week, online. I review all the charges, checks, activity, etc. Looking for anything funny. And I reconcile every account monthly in Quicken.
I haven't had two problems in twenty years with any of this (random CC fraud aside).
Re: Online Bill Payment and Security
Yeah, this is my thinking as well.Sidney wrote:When you send them a check, the routing code and account number are on the check. That is all that is needed for electronic banking as well.
Electronic transactions via ACH are basically the same thing as a check in purely electronic form. I don't think either is very secure, but there are some legal protections against fraudulent checking account transactions.
I like ACH transaction since they save postage and paper, avoid the hazard of checks getting lost in the mail, and can be scheduled for precisely the desired date.
All companies will not accept credit cards. For example, none of my utilities or medical insurance will. However, they are scheduled for direct debit from my checking account.jb9 wrote:Thanks for all the suggestions. So is an ACH Transaction essentially a push? So could one basically pay all bills with a credit card and then do an ACH push to pay off the credit card?
I am so old school.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
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Same, ATT and Electric Company go to CC for reward points.
All other bill are paid through banks bill pay service.
All other bill are paid through banks bill pay service.
livesoft wrote:For a couple of bills, I have them just charge my credit card.
For the rest use online bill pay from my checking account. I push out the money, rather than pull the money.
I don't worry about my personal banking information. It is always available on any check you would write anyways.
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I've been paperless as much as possible since about 2000 with no problems. I either pay by card or by an online transfer from the web site of the company/organization that I want to pay (pulled from the bank). I only write about 2 paper checks/month.
I use Quicken to track both bank and credit card accounts and have also set it up to remind me a couple of weeks ahead for all recurring bills that need to be paid. My weekly ritual is to download all account activity, then look at the reminders to see if I have to log on to any web sites to pay a bill. It usually only takes me about an hour to reconcile all of my accounts, review transactions, and pay bills.
My latest improvement to the process is to install Roboform on my computer. This saves the web site and passwords for all of my accounts and fills in the log in forms so that I don't have to look them up and type them in. I think its much better to save passwords on a password protected encrypted file on my computer than to write them down somewhere or worse yet, use memorable ones that can be easily hacked.
I use Quicken to track both bank and credit card accounts and have also set it up to remind me a couple of weeks ahead for all recurring bills that need to be paid. My weekly ritual is to download all account activity, then look at the reminders to see if I have to log on to any web sites to pay a bill. It usually only takes me about an hour to reconcile all of my accounts, review transactions, and pay bills.
My latest improvement to the process is to install Roboform on my computer. This saves the web site and passwords for all of my accounts and fills in the log in forms so that I don't have to look them up and type them in. I think its much better to save passwords on a password protected encrypted file on my computer than to write them down somewhere or worse yet, use memorable ones that can be easily hacked.
Lorne
I recently switched from Roboform to LastPass. I really like how it works, doing everything RF did, and a little more. And (IMHO) better. If you're not too committed to RF yet, check out LastPass.tweedlw wrote:My latest improvement to the process is to install Roboform on my computer. This saves the web site and passwords for all of my accounts and fills in the log in forms so that I don't have to look them up and type them in. I think its much better to save passwords on a password protected encrypted file on my computer than to write them down somewhere or worse yet, use memorable ones that can be easily hacked.
I like that idea of using one CC just for auto drafts, if I had enough bills that allowed payment by CC.
I use banks, with auto drafts, and even let companies I have some trust in pull money from bank accounts. But I don't keep large balances in that account, or a huge amount of money at that bank overall.
So for example, I might have some CDs at that bank, and a separate bank account at that same bank with more money, but keep a relatively low balance in the account used for billpay.
If I were to have a very large total bank balance including CDs, I would use a completely separate bank for most of it.
If something goes wrong, my low balance in the billpay account should stop a huge payment or fraud. If a large payment still happens, and I have funds elsewhere at the same bank, I would be concerned that those funds would be frozen by the bank.
I use banks, with auto drafts, and even let companies I have some trust in pull money from bank accounts. But I don't keep large balances in that account, or a huge amount of money at that bank overall.
So for example, I might have some CDs at that bank, and a separate bank account at that same bank with more money, but keep a relatively low balance in the account used for billpay.
If I were to have a very large total bank balance including CDs, I would use a completely separate bank for most of it.
If something goes wrong, my low balance in the billpay account should stop a huge payment or fraud. If a large payment still happens, and I have funds elsewhere at the same bank, I would be concerned that those funds would be frozen by the bank.
If the vendor will accept it, I generally use CC since you get reward points. If I pay by check, I generally use my checking account's bill pay, since all of the stuff is in one place. Electronic is no worse than paper for security. When you send a check, your routing number is on the slip. Mysterious transaction can be reversed.
One note of warning, do not go completely automatic. Electronic bill pay is a great way to save postage and avoid late payments, but always review your bills to make sure that you're not being billed for extra stuff or that there is an error.
Paul
One note of warning, do not go completely automatic. Electronic bill pay is a great way to save postage and avoid late payments, but always review your bills to make sure that you're not being billed for extra stuff or that there is an error.
Paul
I have been paying almost all of my bills through my bank's free online service for several years without any trouble.
I have my credit frozen with the 3 agencies, so I do not worry about security issues. By the way, I decided to freeze my credit when I got my Medicare Card. For those that don't know, the number on your Medicare Card is your SOCIAL SECURITY number plus the letter A.....brilliant! So every time you use it you give out your SS number.
I have my credit frozen with the 3 agencies, so I do not worry about security issues. By the way, I decided to freeze my credit when I got my Medicare Card. For those that don't know, the number on your Medicare Card is your SOCIAL SECURITY number plus the letter A.....brilliant! So every time you use it you give out your SS number.
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All bills are paid by direct ACH deduction from checking account execpt the few that are on automatic pay - i.e., the ones that are the unchanged each month like garbage collection our condo fee and our church donation.
We avoid anything automatically charged to credit card since any change, like fraud, loss, or change of account for security (just went through this one), causes unnecessary effort to notify vendors.
Our bank guarantees all payment on time by using their automatic bill pay service.
We avoid anything automatically charged to credit card since any change, like fraud, loss, or change of account for security (just went through this one), causes unnecessary effort to notify vendors.
Our bank guarantees all payment on time by using their automatic bill pay service.