March 13, 2018 (Courtesy of the Financial Consumer Agency of Canada) – During Fraud Prevention Month, the Financial Consumer Agency of Canada (FCAC) reminds Canadians of the risks of disclosing their online banking and credit card information to anyone, including third-party financial mobile applications and online services.
The emerging financial technology (or “fintech”) sector is growing at an unprecedented pace. Consumers are increasingly using third-party mobile apps and online financial services, such as independent online lenders, financial aggregators and rewards programs.
Some of these companies use software to verify online banking and credit card information before a consumer can access their products or services. They may require consumers to provide their debit card or credit card numbers along with their user IDs and passwords to confirm their identity.
Consumers are normally protected from unauthorized credit card and banking transactions made using their financial institution’s online banking service. However, by disclosing their online banking user IDs and passwords to a third party, consumers may breach their financial institutions’ user agreements and be held liable for any losses resulting from unauthorized transactions despite any security measures the third party service may have in place.
Consumers should carefully read their financial institution’s account agreement and online banking or electronic access agreement to understand potential consequences of disclosing certain banking information to third-party financial services.
Most financial institutions offer an online security guarantee to protect consumers who incur a financial loss from any unauthorized transactions made using their online banking services, but certain conditions apply.
Consumers may risk losing their protection against unauthorized transactions offered by their financial institution and be held liable for any unauthorized transactions on their account if they give their online banking information (debit and credit card information, user IDs, passwords or PINs) to any other party.
“As part of our mandate, FCAC regularly monitors and evaluates trends and emerging issues that may have an impact on consumers of financial products and services. While we do not want to inhibit the advancement of new technologies, we want to ensure that consumers are aware of their rights and responsibilities when using these services. Rule of thumb: when in doubt, don’t share your banking credentials.”
Lucie Tedesco, Commissioner, Financial Consumer Agency of Canada
“Review your credit card and banking user agreements carefully to determine whether sharing information with another party will result in losing your protection against unauthorized transactions. If you feel you are at risk, contact your bank immediately and change your online banking passwords.”