Clark wants to warn you about a new e-mail scam making the rounds. Criminals have been gaining access to e-mail contact lists and sweeping out all the addresses. They then send out a very distressed note in your name to every contact on your list. The e-mail will claim that you're in financial, legal or medical trouble and that you desperately need money right away. The criminals hope that even one or two of your closest friends will respond with an offer of funds. Public e-mail services such as Yahoo! have been hit by this scam, according to The New York Times. Sometimes the criminals will even change your password while they're in your account. At that point, it can be very difficult to reclaim your e-mail address. So if you get a suspicious e-mail from a relative or friend, call them first and find out what's going on before you give them your money. On a related note, there's now a $5 security key that really helps secure your PayPal account. The key generates a random code every 30 seconds that you must use to access your account. Even if a thief has your e-mail address and password, they still won't be able to get in without the code. These kinds of security keys have become so inexpensive yet so invaluable. Clark hopes that brokerage houses and banks will soon be offering these devices to customers.

What do you do if you need money but want to avoid borrowing from the banks? In the past, Clark has always recommended credit unions. But now there are even more options available. Prosper.com is a site where people lend money to each other instead of a bank being in the middle. The investor who takes a risk in lending to you earns relatively high returns and you get a low rate. This is a big success that's growing exponentially. The way it works is that a borrower gets a lot of cash from several different people online. That helps lower the individual lender's risk in the case of default. People are essentially becoming their own loan officers by calculating the risk to see if they want to be part of a loan. There's a similar website in Britain called Zopa.com that's getting ready to come to the United States. A little competition in this field is going to be a healthy thing. However, there are some core differences between Proper and Zopa. The former grades your credit and then assigns you a lender, while the latter is tougher and only allows loans to those with moderate credit.

The volume of transactions on sites like these is growing. So is this a threat to the banking business? While it's still small potatoes today, over time it could be. CircleLending.com is also a good site to use for lending to people who are your family members or friends because it helps you negotiate a contractual agreement. Meanwhile, Clark has a rule for lending to family that he calls the "one time out rule." It states that you can lend to a family member once (and only once) as a gift. Even though they will call it a loan, you may never see the money come back. If it does, you'll be pleasantly surprised. It's kind of the same idea as the old saying, "First time shame on you, second time shame on me."

How can you earn the most on your money that are sitting in a “parking space” such as CDs, savings accounts, and money market accounts? Those places aren’t designed to get you a great return, averaging less than 0.5% interest on your savings. While you’ve always had the option of credit unions and local banks for better deals on savings, there’s now an even better choice: a “Direct” -- an online bank which has no branches, and can therefore offer you better rates. ING Direct (ingdirect.com) was the first bank to do this, and they’ve been phenomenally innovative, with checking accounts offering over 4.5% in interest, no-fee savings accounts and more. They spawned an entire league of competitors who are offering even greater rates on savings accounts now. We’ve gotten almost no complaints over the years on these Direct banks, compared to regular banks, so the customer service is fantastic. The newest player in the game is wtdirect.com, who are geared only to people with big bucks. You’ll need $10,000 to earn any meaningful interest, but they’re paying 5.26%, which is a good deal, and not a teaser rate. They limit the number of withdrawals to 6 per month, so this one is geared for those who mainly want to “park” their cash. Fnbodirect.com has a 6% teaser rate through September, and the national average is about 5.05%. However there are some economic trends that may push the rates even higher- inflation may step up, which will push up interest rates, and in turn, rates on savings. If you want to keep some of your business at a monster mega bank, you can electronically link your high-interest savings account to your crummy mega-bank checking account, and in just two days be able to transfer money back and forth between the two accounts.

Clark has great news for you if you need to borrow money. Online banks offer great interest rates for people trying to save. But what about those who need to borrow? Well, the same great offers are available to them. ING Direct, for example, has been offering mortgages that are below the market norm and have almost no closing costs. Emigrant Direct is also offering a similar deal, and offerings will steadily increase. ING is also testing online checking accounts that don’t have checks. Everything you do will be electronic. So, look for these deals soon!

Clark has been a big fan of electronic bill pay. Since the ‘80s, he’s paid bills over the phone because he’s always though checks were the wrong way to go. The number of people paying bills online has grown in very small increments – until this year! It seems that the number of people who pay electronically will surpass those who pay by check by the end of the year, according to Harris Interactive. So why does Clark like electronic payments so much? First of all, it’s much safer than sending a check. Secondly, you have proof that a bill was paid if questions arise. Best of all, it’s FREE! Check with your bank or credit union on how to set it up. Once you get the vendors and account numbers set up, it’s so easy.

People are getting more worried about lax security in the banking world. More than 40 percent are doing fewer online transactions and more than 50 percent are concerned about their financial information being compromised online, according to USA Today. And about 80 percent of people are now afraid of ID theft occurring online. Add to that the fact that only one of the eight largest banks has moved to cooperate with federal guidelines to use better online authentication. Only Bank of America has adopted real security measures, while 99 percent of banks only require a user name and password. It’s in excusable and unacceptable, and it’s happening at J.P. Morgan Chase, Citibank, Wachovia, Washington Mutual, US Bancorp and Wells Fargo. People can easily access your account and steal your identity with just the user name and password setup. In Europe, there is very little account takeover because they are required to have very tight security features. There are many ways to do this in the U.S., and it would save banks a lot of money in the long run. Instead, banks are undermining people’s faith in our financial institutions. It would behoove everyone if banks would wake up and set up more secure service.

Clark has talked a lot about how safe paying bills electronically really is, but people are often still skeptical. He went to a computer expert to ask just how safe it really is to add some certainty to his claim. One thing you can do is check for the “master lock” symbol at the bottom of the screen while you’re on the site. That lock means the server is scrambling of the data through encryption. It also means that you’re with the right site and the information on it is true. The address should read “https” instead of “http,” which means the server is secure. Some criminals have figured out a way to mimic the “https” address, but when you see that site lock you are A-OKAY.

When you get a bill in the mail, how do you pay it? Many people still pay with checks, but that number is dwindling. About 30 million Americans now pay at least several bills online. About 10 years ago, we wrote about 50 billion checks a year as a country. Now it’s about 30 billion. As a result, check printing factories are shutting their doors. What’s causing the change? Electronic bill pay. It’s just so easy to do once you set it up. And it’s much safer than writing checks. When you send a check, you have no way of verifying that the payment was made. The recipient can simply say he or she never received it. And you’re out of luck. With electronic bill pay, you have all of the proof you need. The way banks mail and process checks is changing, too. When you mail in a check, an electronic image will be taken and your actual check will be destroyed. So, basically, all checks are going to end up in electronic medium. It’s just a matter of whether the check starts out as electronic too.