Be Vigilant and Protect Your Online Finances
Tom Kerr writing on protecting your online finances…
The CEO who was at the helm of Equifax when it experienced a massive data breach did the unthinkable.
Of course, he only did so after Equifax got hacked on his watch…exposing the sensitive data of more than 145 million people.
As he issued his hollow apology, he blamed the whole fiasco on one underling working in the Equifax technology department.
Then he washed his hands of culpability and retired…with an estimated $90 million golden parachute payout.
The lesson learned, time and again, is that you have to be self-reliant and take independent steps to proactively protect your own @ss…and assets.
Consider your online IRA account, mutual fund, or stock portfolio.
When someone fraudulently uses your credit card, your liability is typically limited to $50 (unless it’s a business credit card). Many banks will even reimburse that amount.
But if you suffer losses when your online brokerage account is hacked, there is a chance you won’t be reimbursed at all…unless that company has an explicit written guarantee.
According to an SEC survey, “the vast majority of examined broker-dealers (93%) and advisers (83%) have adopted written information security policies.”
That sounds comforting…until you read the policies.
Most of them outline strategies for the companies or brokers to recoup their own losses.
But the summary of the SEC survey points out that, “Written policies and procedures generally do not address how firms determine whether they are responsible for client losses associated with cyber incidents.”
Like I said, you have to watch your own back in Wall Street’s wolf-eat-puppy world.
Maybe it’s time to call your financial advisor.
Or do as I did…go to the website of your financial services company.
Look for the “Online Fraud Policy” or “Security Guarantee.”
Read it to make sure that it reassures you.
If not, consider moving your account to a company that gives you more confidence and peace of mind.
It’s important to understand that even those with a decent policy require that you do your part to be eligible for coverage. They may stipulate, for instance, that you use anti-virus software and strong passwords that your frequently change.
Most will also ask you to download recommended security patches to browsers and operating systems. Because an unprecedented flaw was just revealed in the chips that power computer devices, that’s especially good advice right now.
If you haven’t yet downloaded those updates, do it.
You also need to be vigilant about your bank accounts.
When you open a checking or savings account at a bank covered by the Federal Deposit Insurance Corporation, or a credit union covered the National Credit Union Administration, you enjoy rather robust levels of protection.
But those are currently capped at $250,000 per depositor, per financial institution.
If you’re lucky enough to hold more than that, spread it around between more than one bank or credit union. Not just another branch, because that’s considered the same financial institution. Open a separate account with one of their competitors.
If you have $500,000 on deposit, for example, it should be divided between at least two different federally insured institutions.
Being independant – financially – is a beautiful thing.
Don’t let the hackers rob you of it.
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