RealTime IT News

E*Trade to Cover Fraud Victims

E*Trade Financial Corp. is reaching out to customers who may be leery of online banking and investing, promising them full coverage in the event their personal information is used for fraud.

Online scammers rob Americans millions each year, according to information corralled by the Federal Trade Commission and security-oriented groups. Moreover, the recent rash of lost data cartridges containing personal information has customers concerned.

E*Trade is looking to alleviate some of those concerns, unveiling its Complete Protection Guarantee.

The coverage plan provides customers complete fraud coverage, bill payment protection and privacy protection in the event of online theft committed via unauthorized access to investing, cash management or lending accounts.

E*Trade's trading software features several layers of security, including Digital Security ID (two-factor authentication), real-time account validation, anti-fraud/theft monitoring and unique confirmation numbers for all wire transfers.

But, E*Trade pointed out, consumers leave themselves open to online attacks because they don't safeguard their computers with anti-virus software, firewalls and anti-spyware.

Despite this, consumers believe banks are responsible for protecting them from online fraud, the online trader said in a statement announcing the new coverage plan.

Citing an Insight Express it commissioned, E*Trade said 77 percent of Americans believe their financial institution holds primary responsibility, or responsibility equal to the customer, for protecting a customer's assets.

"E*Trade Financial's systems are secure, safe and reliable," said R. Jarrett Lilien, President and COO, E*Trade Financial. But the reality is that today's consumers do not always take the necessary measures to ensure their home PCs are adequately protected."

However, many consumers do not recognize that they may be responsible for losses incurred when thieves strike, E*Trade said. The company cited a Gartner report that noted that, unlike banks, brokerage accounts aren't protected by Federal Deposit Insurance Corporation and Regulation E rules, which ensure that consumers get their money back.

"Consumers must be confident that their funds are secure online -- in all circumstances," Lilien said. "The E*Trade Complete Protection Guarantee is E*Trade Financial's commitment to stand by any customer who is victimized by criminal activity."

The coverage plan calls for E*Trade to match any losses arising from fraud in an E*Trade account that results from the unauthorized use of its investing, banking or lending services.

If a customer's brokerage, banking or loan payment is not sent as instructed, the customer will be reimbursed of any related fees, penalties or finance charges.

E*Trade also said it will not sell a customer's personal information to third-party marketers for any purpose.

Customers may view more details about the new protection plan here.