Does VPN provide protection for banking transactions?

Help me out here, I'm having trouble figuring this out. I've seen it suggested to use VPN if you have to connect to your bank from a WiFi hotspot, presumably because all of your traffic is encrypted. That feature seems to have merit even if you are on ethernet. But, if you use VPN, then all of your transactions are going through VPN servers where potentially they could all get captured, just like at a hotspot. So I'm confused.

 

Yes, your data moves through VPN servers and multiple internet "hops". In part you have to trust the VPN service provider who wouldn't last long if the service was insecure. Open Wifi is very vulnerable though because any hacker hanging out in your internet cafe can scan the unencrypted traffic. In particular if your account credentials are captured then the hacker can simply log into your account. The act of logging in is the first and most critical "transaction" that needs protection.

 

The VPN dilemma - if you live in the US, you can have added security if you choose a trustworthy US provider (like StrongVPN), but if you want anonymity from law enforcement, then you give up the added security, because you have to choose an overseas provider.

You may think a dishonest VPN provider won't be able to stay in business, but how will anyone know if they are stealing private data and selling it underground?

Thanks for the tip regarding having your login info stolen at WiFi hotspots.

 

Anonymity from law enforcement is a real issue in certain countries and perhaps for some people in the US as well, but so far it isn't something I've felt the need to worry about. I'm more concerned with mundane online banking and internet retailers. Regarding private data being stolen I think it's best to assume that that's always a possibility and have a backup plan in place. For instance I have email notification enabled on my accounts so I become aware quickly of account activity and can notify the bank if fraud occurs - in the US at least there are protections/liability limits if you notify the bank quickly. All of that said I agree that it's safer for US citizen to subscribe to a VPN service subject to US law.