- The Washington Times - Tuesday, December 20, 2005

Q: I’d like to do all my bill-paying online, but is this a good idea? I’m worried about on-line security and losing important documentation.

A: As long as you’re dealing with reputable companies, you’re much better off shifting all your monetary transactions online.

It’s faster, more reliable, cheaper and — contrary to what many snail-mail devotees think — more secure.

“I recommend it wherever possible,” said Wendy Barlin, a certified public accountant and financial manager. “I’ve never had anybody who’s had a problem.”

Miss Barlin, whose clients are mostly individual business owners, said she’s never had a client whose information has been stolen through the computer, but she’s had a couple clients whose snail mail has been stolen from mailboxes.

“You’re safer online than offline,” said Matt Lewis, executive vice president and general manager of the electronic-commerce division at CheckFree Corp., which provides e-commerce and payment services. “And the safest place for you to be online is through your financial institution.”

Online bill-paying isn’t completely risk-free, but individuals are more likely to be targeted by Dumpster divers and mailbox raiders than by computer hackers, who tend to aim for larger institutions because there’s greater payoff.

“There is a risk to your individual computer, but in general, the risk is more to the vendor that you’re working through,” said Mark Lobel, a specialist in security and privacy services at PricewaterhouseCoopers. “For a criminal, it’s much more efficient to break into the company.”

That’s why it’s important to set up online bill-payment with a reputable vendor — ask the company if it is insured and will compensate losses.

Even if you become a victim of identity theft, you’ll nip the problem in the bud faster online than through the mail, according to a 2005 identity-fraud survey report from Javelin Strategy & Research. Identity-theft victims who detected the crime by monitoring accounts online experienced an average financial loss of $551, compared with an average loss of $4,543 when the crime was detected through paper statements.

At some point, you’ll need hard copies of certain transactions, of course, especially bank statements when tax time comes. But even if you go totally paperless, most financial institutions will keep all information online for six months for you to print out on your home printer. If you need documents older than that (or if you don’t have a printer), you can ask your bank to mail them to you.

Miss Barlin also suggests that you back up your data and keep copies of all online statements on your hard drive so you don’t lose track of your finances. Again, it may worry some folks to have so much personal information on their computers, but it’s much safer on a hard drive than sitting in a pile of mail.

Online bill-paying has been catching on since it was introduced in the 1990s, but there are still many Americans who have yet to switch. About 58 percent of U.S. consumers pay at least one bill per month either through their online bank or bill-payment service, or directly at a payment recipient’s Web site, according to Phoenix ESP Payments Research Group.

It takes a little research and a willingness to change your habits, but it shouldn’t be difficult to find ways to reduce your paper bills. The majority of financial institutions and utility companies will stop sending bills through the mail upon request.

According to the Phoenix ESP research, 74 percent of utility companies and 79 percent of financial-services companies, including credit-card issuers and insurance companies, can stop mailing you paper bills if you sign up to pay your bills online. (Although some jurisdictions prohibit utilities from doing so.)

Once you do, there will be fewer trips to the post office for envelopes and stamps. You can even set up accounts to pay your bills automatically.

Need more motivation to make the switch? It’s also good for the environment. According to a 2003 survey by Javelin, 18.5 million trees per year would be saved if Americans viewed and paid their bills online.

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