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Cyber ​​fraudsters empty pension accounts: how to protect yourself

Beth Bennett didn’t check the balance on her retirement account very often. But when in November she decided to do this, the woman expected to see a balance of more than $ 80. Instead, she found about $ 000 on her account. Writes about this USA Today.

Фото: Depositphotos

“I was very shocked by this. I thought it was some kind of mistake, ”she said.

She soon found out that this was not a mistake.

“Indeed, my money has been systematically withdrawn over the past several months,” Bennett said. Upon learning of this, she contacted her employer's retirement plan consultant.

Someone stole her personal information and impersonated her by changing Bennett's mailing address. The bank cashed the first two checks, but when Bennett discovered fraud, payment was suspended on the third check.

But another shock awaited the woman ahead.

When she contacted a representative of the fund company, it turned out that there was no guarantee that her money would be returned.

Attacks on retirement accounts grow

Unlike credit card frauds, losses from fraud in retirement investment accounts are not protected by law, although companies usually claim to recover funds lost as a result of fraudulent activity.

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This is a problem to be aware of, as cyber attacks on retirement accounts are growing.

“Hackers are finding it increasingly difficult to break into bank accounts and have launched attacks on 401 (k) accounts,” said Ed Mezhvinsky, senior director of the US federal consumer program.

At a 2019 forum for retirement planning institutions, industry expert Larry Goldbrum said that in general, cyber fraud and account fraud has decreased, but since 2018, the number of cases of pension account fraud has increased.

Cybercriminals today “are looking for every possible route to people's financial transactions,” said Steven Silberstein, CEO of the Financial Services Clearinghouse and Analysis Center, an industry consortium dedicated to reducing cyber risks in the global financial system.

“Email compromise, phishing and the assignment of social media profiles are some of the key tactics used to target all types of assets, including retirement accounts,” said Silberstein.

When phishing, cybercriminals send emails allegedly from a known or trusted sender in the hope of convincing potential victims to disclose confidential financial information.

The good news in the Bennett case is that American Funds, a mutual fund company that maintains retirement savings, agreed to recover the lost money, although at first the representatives did not give her any guarantees for a refund.

However, the Bennett case should serve as a warning to people with 401 (k) accounts and other types of retirement savings accounts.

“While our nearly 7000 member financial institutions are constantly evolving their cyber defenses, it is also important for consumers to observe good cyber hygiene and watch out for suspicious activity,” said Silberstein.

Beware of spam emails

“When fraudsters gain access to consumer bank and retirement accounts, the entry point is most often the victim's email address,” says Kevin Bong, director of cybersecurity at accounting and consulting firm Sikich.

Often, people's account passwords obtained as a result of hacking data and then sold on the dark network to cybercriminals are used to hack into an email account and hijack it without the knowledge of the victim.

Bennett is executive director of the Wisconsin Newspaper Association. Her retirement plan is known as the “Simple Plan,” a deferred tax account sponsored by an employer that bears some resemblance to plans 401 (k) and 403 (b).

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In response to a question about the Bennett case, an American Funds spokesman said: “Our mission is to help people save up for retirement. When one of our customers is a victim of identity theft, we take the responsibility to immediately conduct a thorough investigation of what happened and take appropriate measures. ”

According to experts, companies need to investigate cases of fraud and make sure that law enforcement is notified of the crime.

How to protect yourself

Cybersecurity experts say that if you have access to your online accounts, one of the best decisions you can make is to make it harder for hackers to hijack your accounts. Here are some tips:

  • Make sure that any computer or device used to access accounts is protected by a firewall and has current anti-virus and anti-spyware software.
  • Be careful when answering questions, opening attachments, or following links in emails asking for your financial information.
  • One important way to make your account more secure is to have a strong password that is not used for any other type of online account. Long passwords with phrases like "Dogcatfish22" are better and easier to remember than short ones. “The password is much longer, so people can't crack it that easily,” Bong said.

Pension accounts can be especially vulnerable because account holders may neglect to view their account.

Bennett said she wants people to know that they need to regularly check their retirement savings.

“If it can happen to me, it can happen to everyone,” she said.

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