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The solution is to stick with open-source tools so that you don't have to worry about these issues. They may claim whatever they want, but proving this is tricky.

Even if the software supports client-side encryption, these services are generally not open source so the code can't easily be audited by a third party.

You have to trust the service with your confidential information.

If the site goes down temporarily, goes out of business, or significantly increases their fees (and you don't have a local copy of your data), you'll really be in trouble.

It's necessary to rely on a third-party service.

The two major issue with these types of services are the following: They're not without their problems, however.

They also generate passwords as needed and store them.

Services like LastPass are extremely popular for automatically entering credentials (username and password combinations) for logging into Web sites.