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Is your money guaranteed from online fraud?

Do you know the policy your financial institution has regarding unauthorized access to your account through their Internet site? Are you protected against 100% of any losses that occur due to fraudulent access? If you haven’t checked the policy at your financial institution, it’s a good idea to do so. If they don’t offer protection for your assets then you need to start asking questions or think about moving them.

Identity theft and fraud continues to appear in the news. Most financial companies have increased their security and authentication programs but the thieves have become more sophisticated too. Some companies are struggling to gain new online customers because those customers are concerned about online theft. Both provider and customer  have alot to lose in this matter. The most risk adverse way to avoid online fraud for the customer is not to use online services right?

The good news is that many companies are now backing their security systems and procedures with guarantees. I did a random search of five financial institutions this week to find their policies related to online fraud and theft. I was happy to find that all five of these companies have a 100% guarantee clearly stated on their sites.

The American Express Fraud Protection Guarantee

Use the American Express® Card online or off, and you won’t be held responsible for any fraudulent charges. Period.

No fine print, no deductible –just pure protection, so you can shop with confidence.

The HSBC $0 Liability Online Guarantee

You’re 100% covered for monetary losses resulting from any unauthorized account use or online account theft including:

  • HSBC Personal Internet Banking and free Bill Pay service — you will not be liable for unauthorized or fraudulent online bill payments or funds transfers resulting from online theft of your HSBC account numbers or passwords
  • HSBC credit cards — your liability for unauthorized use is $0
  • HSBC Bank account — if you discover your online password has been stolen and funds withdrawn from your account, your liability is $0
  • HSBC Premier customers — $0 fraud liability Identity fraud resolution services and expense reimbursement*. if you lose your Premier World MasterCard®, we’ll cancel it immediately and you will receive a replacement credit card the next day, no matter where you may be. If you lose your cash or your cards, we’ll immediately provide you with $1,000 U.S. in cash to meet your temporary needs.

The E*Trade Complete Protection Guarantee

Our promise to you is simple: E*TRADE Securities LLC or E*TRADE Bank will cover any loss that results from the unauthorized use of our brokerage, banking or lending services1.

The Schwab Security Guarantee

We want you to have the highest level of confidence when you do business with Schwab. So we offer you this simple guarantee: Schwab will cover 100% of any losses in any of your Schwab accounts due to unauthorized activity.

The Merrill Lynch Online Fraud Protection Guarantee

We value you as our client, and we always want you to feel safe doing business with Merrill Lynch. As a commitment to our clients’ online account security, we are offering this guarantee: We will reimburse you for any losses that occur through Merrill Lynch Online® (our online retail brokerage platform) due to unauthorized third party activity.

Find and keep customers: 3 of the basics for success

With the negative outlook of the economy and reports of down holiday spending, merchants need to look at basics for attracting and retaining customers.  Companies can weather the storm by focusing on core competencies, innovating, and reaching out to customers with individual information. Here’s a look at three principals for accomplishing this goal and some companies that are applying them already.

1. Promote your strength and core offering – The concept seems so basic, and yet is often forgotten.  The thought is also frequently applied to individuals in discussion of self knowledge and betterment.  Another way to think of this is “don’t forget your core competencies.”

A good example of this comes from the banking industry. What is a primary way a bank makes money?  They loan money to individuals and businesses and charge a higher interest rate than what they pay out for deposits.  It’s a little more complicated than that, but the main point is that that a bank is in the business of selling money.  When a bank isn’t making loans, they have cut one of their primary vehicles for making money.

The  “financial crisis” of 2008 has taken a large toll on the banking industry.  Many banks have gone out of business and many have received loans from the government to stay in business.  Consumer confidence in banks is low and excessive negative media reports certainly don’t help. Individuals and businesses weigh the health of their own bank and wonder how to get a loan.

Lesson number 1 in finding and keeping customers comes from Associated Credit Union.   Here is the messaging that was included on member statements in the fourth quarter 2008:

Associated CU has money to lend.  Need a car? Need a mortgage? Use your Credit Union.  Apply Online.

Your deposits are safe and sound at your Credit Union. They’re Federally insured up to $100,000 by the National Credit Union Administration, an agency of the U.S. government.  Ask us how we can help you structure your accounts for more coverage.  We’ve been around since 1930!

These statements are simple and to the point. They tell the member that Associated Credit Union has money to lend and they want to lend it!  The statements are also crafted to build confidence with the members.  They reassert the federal backing of the deposits and show the longevity of the organization by showing they have been around since 1930.

2. Provide new or better incentives than previously offered

This concept is all about innovation. Which companies are innovating with new products and services within their existing core competencies?  I found two such examples recently: The Schwab visa card and the TMobile @home service.

Schwab is now offering a Visa Card that offers 2% cash back on all purchases. The product complements Schwab’s core brokerage products by depositing the cash automatically into the account.  What’s so great or different about this card?

  • The 2% cash-back is for all purchases. That’s simple and easy to remember.  It’s not like other cash cards that have a tiered cash-back amount based on your spending.  It’s also different in that you don’t have to keep up with different cash-back amounts depending on what type of goods/services you are buying.
  • No limit on the amount of cash-back you can earn.
  • No monthly minimum to spend.
  • No annual fee.
  • The cash is deposited monthly to your account, not yearly.

This offering is pro-customer and should help Schwab with increasing customer loyalty while at the same time increasing their core deposits.  I like the concept of moving the money automatically to a savings account as it promotes good habits in saving and investing.

The second example of offering new incentives and products is the TMobile @Home service. This is TMobile’s play at a home based phone service.  It’s offered at $10/month for existing TMobile subscribers with rate plans of at least $39.99/month.  The plan gives unlimited nationwide calling. It uses Voice over IP (VoIP) through a router.  There is nothing new about VoIP service and many players have it now. What is unique is how TMobile is positioning the offering.

This plan from TMobile is a transition plan for consumers who are looking to transition to a cell phone only lifestyle, but are not yet ready to completely cut ties with the home phone.  At $10/month the price is negligible. It doesn’t require that a computer be on such as other low cost alternatives like Skype. There are other optional features with the service such as a hot spot support where customers can use their cell phones within the vicinity of the house and not run their monthly minutes.

3. Don’t be silent, consumers are looking for deals

Talking to your customers and letting them know about sales and discounts is nothing new in the retail world. However, some businesses are advancing ahead of their competition by intelligently using information about individual consumer’s shopping and spending habits. If you’ve shopped at Amazon lately you’ve undoubtedly seen this.

Amazon has become a master at presenting potential and repeat customers with ads and information based on a wide range of factors including: current shopping category, past purchases, related items, and other shopper’s behaviors. A customer feels like they are getting individualized attention during the shopping process.

But the touch-points don’t end at the point of sale. Amazon proactively uses email to notify customers about sales and specials for products that are related to past purchases or categories they may like. While this type of advertising could be considered annoying by some, it’s a great tool for driving additional sales. After all, consumers are looking for deals. Amazon has found a way to reach them with personalized information. If the consumer doesn’t want to read the emails, they can unsubscribe or simply delete them. Everyone wins in this arrangement, and all because Amazon has the built the ability to intelligently reach out to its customers with relevant and timely information.