In December, Yahoo reported that 1 billion accounts were hacked in 2013. Those email accounts contained personal details, email exchanges and financial information – and people were not aware of the issue for years.
Yahoo's problems are not unique: Hacking and identity theft are a growing danger, especially for day-to-day users. People often use the same passwords for multiple accounts, or use simple-to-guess passwords like "123456." Haphazard security habits endanger financial data, which are not good for finance firms or their clients.
So what precautions do financial advisors suggest to protect their information? Forbes Finance Council members have this to say.
Clockwise from left: Elle Kaplan, Justin Goodbread, Ismael Wrixen, Lee Reams, Stacy Francis, Ivan... [+]
1. Always Contact An Institution Directly
One of the more devious phishing scams out there is when "financial institutions" (actually scammers) will reach out to you via phone or email to gain personal information and steal your identity. Often, it's almost impossible to tell these fake communications from the real thing. That's why I tell clients to always contact an institution directly, from the information on their website, when it happens. - Elle Kaplan, LexION Capital
2. Shred Unwanted Printed Material
We all receive financial information electronically and in print. Always shred the unwanted printed material. I recommend using different passwords to access your important electronic information at your institution. Only provide personal information over the phone in conversations which you have initiated, and a good identity theft company could be worth its weight in gold. - Justin Goodbread, Heritage Investors
3. Update Passwords Periodically
The first line of defense is still the best line of defense. Update your password periodically, and make it hard to guess. Avoid the standard passwords, such as birth dates, the name of your pet, the name of your spouse or significant other, “qwerty,” and so on. - Ismael Wrixen, FE International
4. Use Secure Portals
Many still believe that email is a secure way to share financial documents. Most hacks are of email accounts and this makes it very easy for identity thieves to get access to social security numbers and financial information. The use of a secure portal adds a layer of security that helps protect your identity. Mix up your passwords for every account, so if one is compromised they all aren't. - Lee Reams, ClientWhys, Inc.
5. Establish Two-Factor Authentication
If you receive an email calling your attention to something that needs to be addressed in a financial app/site — don't click any link in the email, as it may be fraudulent — log in through the app's portal. And be sure to set up two-factor authentication anywhere that houses your financial information. - Ryan Marquis, Plastc, Inc.
6. Don't Leave Passwords Near The Computer
Once, I received a routine wire transfer request email from a client. Nothing suggested anything was amiss, except that they used a pronoun for a spouse when they usually used a nickname. When I called to verify, I learned they hadn't sent the email at all. They were hacked by a family member. They left a post-it note near the computer. Online security begins in the home. - Ivan Illan, Aligne Wealth Preservation & Insurance Services LLC
7. Regularly Monitor Your Accounts From A Private Network
To best keep your personal finance information secure, it is important to regularly monitor your accounts (at least once per week) and to change your password often (every three months). It is also critical to be in a secure setting while banking online. I would not recommend using a public Wi-Fi at a Starbucks or local coffee house, but in a secured, private home network. - Stacy Francis, Francis Financial, Inc.
