Cybersecurity: Stop What You're Doing and Take ActionSubmitted by S. F. Ehrlich Associates, Inc. on August 23rd, 2018
August 15, 2018
We heard from a financial planner colleague in Maryland who recently shared an absolutely incredible cybersecurity scam experienced by one of his clients. The series of events is so frightening that we’re compelled to strongly urge you to take steps to better protect your investment and other accounts. Cybercriminals are using technology to degrees never before seen.
Some of the elements of the fraud:
• A fraudster called a Schwab account holder and spoofed Schwab’s phone number on caller ID so the account holder believed Schwab was calling.
• The Schwab account holder provided some personal information to the fraudster because he erroneously thought he was talking to Schwab.
• The fraudster then called Schwab and was able to spoof the account holder’s phone number on caller ID so Schwab believed they were talking to the actual account holder.
• Armed with a significant amount of personal information, the fraudster arranged for a withdrawal from the Schwab account to a bank checking account which was opened in the client’s name but not by the client.
What you should do to safeguard yourself against fraud and your Schwab accounts:
• Call the Schwab Alliance Team (800 515-2157) and add a verbal password. This will be requested anytime you, or someone acting as you, call Schwab to initiate a transfer or withdrawal from any of your accounts.
• When you call the Schwab Alliance Team, have them help you set up a random number generator (also known as a two-factor authentication key) to be used every time you log into your Schwab account(s). The keys are available in multiple forms, including a physical device you can carry around in your pocket as well as a smartphone app.
• Ask the Schwab Alliance Team if you can record a voice authorization sample so they can identify your voice as a final means of verifying your identity should you ever call them.
• Our colleague from Maryland also discovered that debit cards are less secure than credit cards and are vital to moving funds between accounts. Consider eliminating, or at least limiting, the use of a debit card if you have one.
None of the above security steps will interfere or restrict our ability to manage your accounts at Schwab, as we don’t use the same portal as clients to access accounts. (Please note these types of situations are not unique to Schwab. If you have an account at another custodian, or even a bank, you should call to ask if they have similar authentications to avoid security breaches there as well.)
While technology has enhanced all of our lives, it has also enabled criminals to dream up new scams on a daily basis. More security is better than less, so take steps today to reduce the odds that you’ll be a victim of a cybercrime.