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The Simple Dollar

Are online personal finance tools trustworthy?

If you hand over key personal data to a company, consider whether their service is worth an increased risk of identity theft

By Guest blogger / March 27, 2011

This screen shot from Mint.com shows an example graph of the breakdown of somebody's personal finances. Can personal finance software really keep your information secure?

Courtesy of Mint.com

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What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Mint and privacy
2. 401(k) distribution issues
3. Small emergency fund?
4. College student planning for future
5. Helping people in need
6. Old debts
7. Finding new ideas
8. Mid-20s career crossroads
9. Tracking versus controlling
10. Publishing concerns

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Q1: Mint and privacy
Have you heard of Mint.com? I was wondering if you had, what you thought of it. To me it looks like a very good way to see your finances all sorted out, and it’s free and has a cool iPhone app to go with it.

I tried it out and provided it with info for just one credit card, immediately afterward I felt a panic ensue, wondering what I was exposing myself to and if there was any real danger in doing so. So, I changed my password on my credit card account and deleted the app. I’m sure whatever mint.com learned about my from that one transaction will be there info forever, but they won’t be able to access info in the future.

Still, I’d like to keep using it. I have friends that really get some use out of it too, but I feel pretty uneasy about it at the moment.

If you have any opinions on it I’d like to hear them!
- Kevin

Much like you, Kevin, I don’t use Mint because of privacy concerns.

Now, this is not a criticism of Mint – let’s make that clear. I have confidence that Mint is as secure as it can be and handles data with a high level of security. That’s not my concern.

My concern is that no system is perfectly secure, no matter what you do. It still comes down to human error. Every time you trust your personal information to yet another company, you’re adding a little bit more risk for identity theft to the equation.

Whenever I’m in a situation to add another company to the list of those that have my key personal data, I ask myself whether the product they’re providing is worth that additional risk. Simply put, Mint doesn’t add enough on top of the tools I already use (Excel and Quicken) to make that additional risk worthwhile for me. Other people might feel differently about that risk/reward balance.

This is not a particular concern about Mint. It’s a concern about any company that I would give my data to.