Some banks do this too. They store the password in the clear then at login ask for the Nth character of your password (rather than the whole password). That ob

Some banks do this too. They store the password in the clear then at login ask for the Nth character of your password (rather than the whole password). That obviously means that the whole password is rarely sent over the network. It also means that they can use the same validation system over the phone for telephone banking. The system is however far from ideal of course.