Under the Hood: Protection From Cyber-Crime and Identity Theft—What You …

Perhaps the best step we can take to combat this crime is to spread the news, revealing the tricks of the trade and the tactics of these criminals. However, the first step is to educate yourself. The FBI website has some great information on how to identify and protect yourself from fraud

Additional Tips for Avoiding Identity Theft

Here are a few additional tips to help you avoid identity theft

1) Never click on a link in an email, text, or other communication when the only thing in the body of the message is the link. It’s a good practice to contact the person who sent it to verify its authenticity.

2) Don’t let (snail) mail remain in your mailbox for long. 

3) Report lost or stolen credit cards immediately.

4) Check your credit and debit card transaction information on a regular basis. Report any unauthorized activity immediately. 

5) Shred paper statements, ATM receipts, bills, etc. before you throw them in the trash or recycling. 

6) Don’t write down your passwords, Social Security number, etc. and keep this information in your wallet. Limit the amount of sensitive information you carry. 

7) Consider paying bills electronically and eliminating paper statements and other documents (go paperless). 

8) Consider subscribing to a high-quality, reputable identity theft protection service. (Here’s a side-by-side comparison of the major service providers.)


Adopt and Follow a Security Policy

When identity thieves find a lucrative niche, they exploit it until it dries up. According to Bill Winterberg, technology expert and founder of FPPad, a technology consulting firm for advisors, identity thieves are specifically targeting financial advisors.

He recommends that advisors adopt a security policy which requires two methods of verification. This becomes more important as the size of the firm increases. For example, if client John Smith sends an email to his advisor requesting money from his account, and his advisor couldn’t be contacted, can anyone else at the firm verify that the client is who he says he is? Does anyone else at the firm know Mr. Smith personally?

Winterberg also suggests keeping a list of security questions in your contact management system (CMS) for this type of event. He also recommends questions that cannot be easily answered by researching the Internet or other venues. For instance, he would not recommend questions such as: Mother’s maiden name or Date of Birth. He does, however, recommend questions such as:

1) Name and type of animal of your first pet

2) Color, make and model of your first car. 

The point is to use information known only by the client. This is more important with high-profile clients who may have online biographies that could be accessed by thieves. Winterberg recommends compiling a list of appropriate questions in your CMS. In addition, you might use a video phone system such as Skype, Facetime or Google Hangout. Then, you can see the client face-to-face, which is pretty hard to falsify. 


Identity theft is one of the fastest growing crimes and anyone can fall prey to it. Hackers are not just targeting the wealthy. With the proliferation of online commerce, the desire to get something for nothing, and a generation that has grown up with computers, many criminals have turned to technology rather than weapons. Therefore, we need to be diligent in our quest to protect all sensitive information with which we have been entrusted. The Federal Trade Commission is an excellent resource for information on the latest scams and tips on how to avoid them. In addition, you can sign up for email alerts to keep you abreast of new developments. 


We invite you to view the entire collection of Under the Hood articles that provide insight into common issues faced by advisors and their clients. For example:

Under the Hood: Reverse Mortgages—What You Need to Know

Article source: http://www.thinkadvisor.com/2014/08/15/under-the-hood-protection-from-cyber-crime-and-ide

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