Financial Health: Protect yourself

Please pay attention to what I am going to say here: very smart people are conspiring to take steal from you. Furthermore, you are not immune, regardless of your age or level of technical/financial sophistication. These crooks are very smart.

In recent months, I have heard numerous stories from friends and acquaintances that have been hacked. Amazingly, many of these stories are coming from peer e-commerce business owners. These are people who understand security issues and take them seriously. And yet, they are still getting fooled and in some cases, losing a lot of money.

Here are some important tips you need to know:

1) If a bank calls you and asks you for a security code that has been texted/emailed to you, you should not assume it is actually your bank. Scammers often use a victim’s identity to do a password reset on the victim’s bank website, which in term generates a code being texted to the victim’s cell phone. They then call the victim pretending to be their bank and asking for the code.

Always be suspicious if someone calls and claims to be your bank and never give them information, even if they pressure you or scare you. Simply hang up and call your bank directly.

2) Take passwords seriously and use two-factor authorization for any banking accounts. Apps like LastPass make it very easy to use complicated passwords without having to remember them or write them down. I strongly recommend you use LastPass or something similar so that you can use unique, strong passwords on all of the important websites you use.

Two-factor authorization (getting a text/code sent to your phone when you log in) is critical these days for important accounts, and that is especially true for your email account. Remember: if a crook gets access to your email, he can reset passwords very easily on all your accounts, essentially locking you out of them.

3) Be careful of search engine results. Crooks often buy ads at the top of search engines offering deals to try to get access to your other accounts. For example, you might see an advertisement for a bank offering a great savings account rate. It is conceivable that you could end up setting up a fake bank account at a fake bank and transferring money that you will never see again. (Read this article for more information.)

4) Consider extreme steps to protect yourself. As uncool as it may sound, disabling online access to your accounts entirely and going back to phone/mail access may not be a bad idea. At a minimum, look for banking solutions that offer protection. For example, I often recommend Fidelity as a place to hold money because it has a money lockdown feature that keeps any money from leaving your account without your express permission.

5) When you shop online, use credit/debit cards rather than EFT, money orders, or checks. Shopping online is actually quite safe with credit/debit cards because your bank gives you 100% protection if something goes wrong and will quickly shut down the compromised card and give you a new one.

Over time, more and more solutions will become available to alleviate the current risk. However, at this particular point and time, you have to be extra careful with your finances if you are managing them online.