by Joseph Kenny | 01/23/10

Millions of consumers use their credit cards and do online banking every day. Most have no choice but to trust the financial institutions have put enough securities in place to protect consumer assets. The internet has become so sophisticated and uses such complex technology that most people really have no idea how the systems work.

A classic example of this fact is the recent report that Citigroup was being investigated by the US federal government because millions of dollars was missing from customer accounts. The report was published in the Wall Street Journal and the article claims that hackers had stolen the funds.

Citigroup vehemently denies this occurred and says that no thefts of this magnitude had taken place. The Wall Street Journal claims that the Citigroup accounts system was hacked into by an unknown group and the Federal Bureau of Investigation (FBI) was trying to figure out how the theft was accomplished and who had the sophistication to steal so much money through hacking. Citigroup has clearly stated the Wall Street Journal report is false.

As consumers read these kinds of stories, the issue of cybersecurity becomes even more obscure to the average internet user. Was the Citigroup system hacked or not? Is the FBI investigating or not? And what can consumers do on their end to protect themselves?

Other than following basic internet security rules when banking online or using a credit card, consumers must continue to rely on the financial institution to protect their accounts from unauthorized access. Citigroup admits that there are instances of fraud uncovered. The company also admits that hacking attacks occur in third-party systems accessing the Citigroup systems. But Citigroup says there was never a breach of the main system and it spends millions of dollars staying ahead of domestic and international hackers.

Today’s computer hackers are very sophisticated. Many of the large scale hacking operations are connected to organized crime rings. Russian cyber gangs, for example, are known to have hacked into systems. They manage to reach main systems by accessing the third party firms processing transactions through the giants like Citigroup, Inc. Another common approach is to infect a consumer’s computer and then log keystrokes thus gaining password and account information.

A third means of theft involves intercepting information transferred from Automatic Teller Machines (ATM) or through wireless communication to the financial institution.

What all this means is the bank robbery has gone online and high tech. So what can consumers do? It is imperative that people install anti-virus and security software on their home computers. It is not advisable to access bank accounts online from computers other than your own unless you have assurance security is in place. When accessing banking information, stay alert for anything that does not seem right. This may sound vague but misspellings or poor grammar usage in emails or on a website are often signs the internet user is not accessing the real website.

In addition, when using ATMs or credit card machines, make sure no one else is close to you and don’t let anyone else see the PIN number you enter on table top credit card processing machines. Finally, use financial institutions you can trust and that have the ability to invest in state-of-the-art security systems.

In the end though, it’s up to the financial institutions to protect customer accounts and adequately secure their systems.