Wednesday, July 01, 2015

Why Your 401(k) Is Such an Attractive Target for Hackers

http://www.thefiscaltimes.com/2015/06/24/Why-Your-401k-Such-Attractive-Target-Hackers?utm_campaign=548f5168cb03a93709042da0&utm_source=boomtrain&utm_medium=email&bt_alias=eyJ1c2VySWQiOiIyOWU2MDRjZS1jNmY3LTQzNTYtOTFhOC1mMjU5ZjNmMjAzOWUifQ%3D%3D

By Ellen Chang, MainStreet
June 24, 2015

Many Americans assume their money is relatively safe regardless of where the account is located. As hackers have moved from retailers to banks, the likelihood of retirement accounts being the next target is increasing.

While having access to financial accounts, including banking and retirement portfolios, has increased accessibility to consumes, it has also increased the risk of fraud “significantly,” said Paul Martini, CEO of iboss Network Security, a San Diego network security provider.

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“Retirement accounts are squarely in their crosshairs,” he added.

IRA and 401(k) accounts are even more attractive targets for hackers, because most people do not track them the way they do their credit cards or checking accounts. The thefts could wind up being undetected for months.

Even cyber criminals who are “semi-skilled” can access a victim’s 401(k) or IRA account easily using stolen personal information and social engineering tactics, Johnson said.

“Once they have access to the account, it can be emptied in a matter of minutes, but the victim may not realize it until they do their annual review of their retirement accounts months later,” he said.

Although retirement accounts are insured by the FDIC for up to $250,000,FDIC insurance only “comes into play if a bank fails,” said David Barr, a FDIC spokesperson. “Banks carry separate insurance to cover losses or other liabilities.”

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Any data posted on the Internet is vulnerable to attacks, including that related to your 401(k) and IRA accounts.

“Your money can disappear,” said Sergio Galindo, a general manager for GFI Software, an IT services provider based in Durham, N.C. If it happened to JP Morgan Chase and other financial companies that invest in millions of dollars to prevent and detect “rogue access,” then it can happen to any account, he said. Finding the hackers is becoming more of a challenge and can take weeks, if not longer.

Cyber criminals are not giving up, especially since many consumers make hacking fairly easy for them. Industry experts estimate that half of people are using the same ID and password combination on multiple accounts.

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Too few consumers are checking their accounts on a regular basis. Galindo recommends checking your account for charges or other changes at least once a month.

“Little charges sometimes indicate bigger issues," he said. "If you don’t recognize it, ask and stop the charge.”

Consumers can safeguard their accounts better by following these five tips:

Don’t make it easy for the hackers. If your browser gives you the option to remember your password, always say no. “Typing in your password also assures that you are physically the one interacting with the system,” Martini said.

When you are shopping online, make sure the website is one you can trust such as PayPal or Amazon, which are more likely to have “security policies in place over a small run-of-the-mill website,” he said.

Always opt to use your bank card as a credit card instead of a debit card, because “recovering fraudulent activity from a credit card is much easier as it doesn’t lock up your bank account funds while that’s in process,” Martini said.

Use strong passwords that are not related to your personal information. Avoid your birthday, a pet’s names or other information someone can find via social media, said Shawn Marck, an executive vice president at Nexusguard, a San Francisco-based security provider.

Take advantage of two -factor authentication when it is available. Some retirement account providers such as Vanguard will text a code to your smartphone before you can log-in.

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