Why no one should use brokerage accounts
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Company Filings More Search Options. Let's hope this never happens to you: You have a few free minutes so you decide to go online to check your brokerage account information. Your account balance is much lower than you expect - and you know that, at least for today, neither the market nor any of your securities fell in value. You see that there were several wire transfers of money from your account to an outside checking account.
But you never authorized those transactions - instead, an identity thief did, and that thief has now stolen your cash as well as your personal information. Like many investors, you may enjoy some of the conveniences of an online brokerage account, like checking your brokerage account information at any time of day or night, buying and selling securities, or even transferring money between your brokerage account and another account.
But if you don't take steps to protect your personal information when you go online, you could be telling your own story of identity theft. Many identity thieves use malicious software programs to attack vulnerable computers of online users.
These software programs can monitor your computer activity and send information back to the thief's computer. Sometimes, these programs will log your key strokes, which allows identity thieves to easily obtain username and password information for any of your online accounts, including your brokerage account.
Other identity thieves " phish " for your personal information. Sometimes fraudsters will use phishing scams to try to get you to download keystroke logging or other malicious software programs unsuspectingly.
But not all identity thieves have gone "high tech. You'll need to protect yourself against identity thieves, whether hackers, phishers, or snoops, when you use your online brokerage account.
Here are a few suggestions on ways to keep your personal information and money more secure when you go online:. Sometimes, it can be extraordinarily difficult to determine whether someone has stolen your identity. If you take the steps below, you may be able to find out whether you've been victim of identity theft and protect yourself from further harm:.
Always act quickly when you come face to face with a potential fraud, especially if you've lost money or believe your identity has been stolen. Securities and Exchange Commission. How Online Identity Theft Can Happen Many identity thieves use malicious software programs to attack vulnerable computers of online users.
How to Protect Yourself Online You'll need to protect yourself against identity thieves, whether hackers, phishers, or snoops, when you use your online brokerage account. Here are a few suggestions on ways to keep your personal information and money more secure when you go online: Beef Up Your Security. Personal firewalls and security software packages with anti-virus, anti-spam, and spyware detection features are a must-have for those who engage in online financial transactions.
Make sure your computer has the latest security patches, and make sure that you access your online brokerage account only on a secure web page using encryption. The website address of a secure website connection starts with "https" instead of just "http" and has a key or closed padlock in the status bar which typically appears in the lower right-hand corner of your screen.
Even if a web page starts with "https" and contains a key or closed padlock, it's still possible that it may not be secure. Some phishersfor example, make spoofed websites which appear to have padlocks. To double-check, click on the padlock icon on the status bar to see the security certificate for the site.
Following the "Issued to" in the pop-up window you should see the name matching the site you think you're on. If the name differs, you are probably on a spoofed site. Even though a web address in an email may look legitimate, fraudsters can mask the true destination.
Rather than merely clicking on a link provided in an email, type the web address into your browser yourself or use a bookmark you previously created. Read your brokerage account agreement carefully because many firms take the position that you are responsible for the security of your account information, such as your username, password, and account number. In addition, your brokerage account agreement may provide information about what specific steps you should take if you notice any unauthorized account activity.