Unfortunately, identity theft is rampant. We can all take steps to limit the exposure of our personal information, but we may be targeted anyway.
If your identity is stolen, the thieves will do everything they can to get into all of your financial accounts. That includes your investment accounts. If they get in, you could find yourself losing your accumulated wealth without much recourse.
It’s crucial to act quickly to protect yourself. Here are five steps to take regarding your investment accounts if you notice any breach of your private information:
Contact all of your investment firms and notify them of the fraud. Ask them what you need to do to protect your accounts. Document what they say in writing. (You should contact all your other financial institutions, too.)
Change your passwords or passphrases. Ideally, you are already using strong passwords or passphrases on all of your investment accounts – and you haven’t written them down where the thieves could get them. Ideally, you are already changing these regularly. Change to a new, strong password or passphrase immediately if you notice suspicious activity on any financial account. A strong password or passphrase is made of random words and uppercase, lowercase and special characters and is at least 12 characters long. Make it memorable without revealing any personal information.
Close any compromised accounts immediately. The moment you suspect someone has unauthorized access to an investment account, close it and transfer the funds into a new account. Once thieves are in, it may not be enough just to change your password or passphrase. Talk to your investment firm about the best way to open a replacement account. Document what they say in writing.
Activate multifactor verification. This is an extra step where your investment firm requires a password/passphrase and another way to verify you are the one accessing the account. For example, when you try to log in from a new computer, it requires you to enter a code sent to your cellphone or email. Requiring this extra step can stop most thieves from accessing your accounts.
Scrutinize your investment accounts for unauthorized activity. Make sure no one has changed your contact information or account numbers. Watch for any unauthorized orders, withdrawals, transfers or trades. Turn on “account alerts,” if available, which should notify you of things like failed login attempts and password changes that could indicate identity theft.
Once you have taken these steps, be sure to monitor all of your accounts for unauthorized transactions and document any communication with your investment firm in writing. If your investment advisor doesn’t act reasonably to keep your money safe after being notified of a potential breach, you may have recourse against the firm.