Vanguard Security Issue (Can I Limit Fund Removal Options?)

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Vanguard Security Issue (Can I Limit Fund Removal Options?)

Postby Noobvestor » Wed May 08, 2013 4:14 pm

I'm trying to see if anyone here knows better than the guy I just talked to, but here's my situation: I don't like Vanguard's security (for reasons already much-discussed on this forum) and want to put up some roadblocks to taking out money (as my VG accounts are for long-term investing - I don't need fast access to withdraw funds). I worry that while I'm on a remote trip and offline for a week, someone could gain access, switch my bank details, and start unloading money, or something to that effect. It's kind of unlikely but it's one of those things where even a small chance at such a hugely negative outcome is quite scary.

My thought was that I could maybe set up something like this: (1) force a 30-day wait and immediate notification on any attempt to remove money from VG to any bank account - thus, the worst someone who got access could do is buy/sell stuff within VG, or (2) make any withdrawal to a bank account be done with writing - still allowing me to add funds to VG or rebalance within VG, but maybe adding a layer of security for removing funds. Those were both really just my first-pass ideas - my hope was that someone on the phone could give me an existing protocol for people wanting to do something similar.

Instead, the options they gave me were, as I understood them, roughly as follows: (1) disable all online access so that only phone or written orders could be placed - this is a huge pain in terms of checking on the account balances, adding more funds, rebalancing, etc... and really doesn't add a layer of security as far as I can tell (it just removes one access point - someone could conceivably still spoof me by voice or mail), or (2) disable all phone orders - again, same problem: this still adds no layer of protection, it just eliminates one week point in the chain (which could be the wrong one). Both of these lack any kind of time delay, which seems crucial to me.

Maybe I'm asking too much, or maybe the guy I talked to didn't know of other options. Does anyone here have experience/ideas that might help? Am I being unreasonable? Or am I focused on the wrong kind of security? Do they have options he didn't mention or that I misunderstood? Do either of his presented options seem like a good first step?
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby rkhusky » Wed May 08, 2013 4:23 pm

Doesn't the linked bank account have to have your name on it? To steal your money someone would have to set up a bank account with your name on it. And get your Vanguard username/password. And either get your secret question answers or spoof the Flash cookie on your computer or get access to your computer.
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby Sidney » Wed May 08, 2013 4:28 pm

I think you are over-thinking this. With a good hard password and a secure email (I now have an email account that is dedicated to VG and I never use it for anything other than to receive - no send) you should be fine. If I am not mistaken, someone would have to open a bank account in your name and change the ACH link to that account to make a withdrawal. The bank account name has to match the name on the VG account.
I always wanted to be a procrastinator.
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby mack123 » Wed May 08, 2013 4:43 pm

I think you're over thinking this. Electronic funds transfers require your name to be on the account, or they don't go through. They also require succesfully answering security questions and a password if done by the web, or identity verification questions from public record if done over the phone. There are already multiple factors in place.

Even if someone sends in a request in writing, the requirements for written withdrawals are very specific. And then what exactly will they do with a check in your name?

You could add an additional security password for phone authentication.. But be warned that this kind of stuff can work against you too.. Imagine if you forgot it
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby Calm Man » Wed May 08, 2013 4:47 pm

I understand the anxiety. I once had it and realized I was over-thinking it and there would never be this type of problem. Just forget about it if you can.
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby Rager1 » Thu May 09, 2013 9:29 am

If you sign up for Vanguard's Voice Verification system, you can eliminate the possibility of someone getting into your accounts.

https://personal.vanguard.com/pdf/c106.pdf?2210065141

Ed
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby rkhusky » Thu May 09, 2013 10:36 am

Rager1 wrote:If you sign up for Vanguard's Voice Verification system, you can eliminate the possibility of someone getting into your accounts.

https://personal.vanguard.com/pdf/c106.pdf?2210065141

Ed


You can never eliminate the risk, just make it smaller so that crooks go after easier targets. This system is only for phone transactions, doesn't cover internet or mail.
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby Noobvestor » Thu May 09, 2013 2:54 pm

Thank you all for responding - I am going to accept the wisdom of the board on this one and concede I must be over-thinking things. I did also pick up a good idea here: perhaps I could add one small layer of security by separating out my Vanguard-connected email account (I can always forward from another account back to my main one anyway).
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby JstSomeGuy » Thu May 09, 2013 3:12 pm

Noobvestor wrote:Thank you all for responding - I am going to accept the wisdom of the board on this one and concede I must be over-thinking things. I did also pick up a good idea here: perhaps I could add one small layer of security by separating out my Vanguard-connected email account (I can always forward from another account back to my main one anyway).


Yea, i would definitely create another email solely for Vanguard. Make sure to use a strong password and don't seriously answer the security questions - think of them as other passwords and come up with answers that don't actually match the question.
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby bb1970 » Thu May 09, 2013 8:52 pm

I have seen several posts recommending having a separate email account for Vanguard or other financial sites. This would require me to check my normal email address and this special one frequently. Some suggest automatically forwarding from the special email address to the special Vanguard email address. I do not see what this would accomplish. If the email's are forwarded to your normal email address, what have you accomplished?
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Re: Vanguard Security Issue (Can I Limit Fund Removal Option

Postby rkhusky » Fri May 10, 2013 8:17 am

bb1970 wrote:I have seen several posts recommending having a separate email account for Vanguard or other financial sites. This would require me to check my normal email address and this special one frequently. Some suggest automatically forwarding from the special email address to the special Vanguard email address. I do not see what this would accomplish. If the email's are forwarded to your normal email address, what have you accomplished?


My service provider lets me have multiple email addresses, which I can view from the same screen. One is used only for financial notifications.
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