Vanguard investors have to take personal responsibility

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mudfud
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Vanguard investors have to take personal responsibility

Post by mudfud » Thu Mar 08, 2007 2:55 pm

http://www.nj.com/business/times/index. ... xml&coll=5
Excerpt: Records indicate unauthorized trades in one account at Vanguard cost the firm nearly $400,000


http://www.sfgate.com/cgi-bin/article.c ... e=business
Excerpt: ......Vanguard spokeswoman Rebecca Cohen replied in an e-mail. "We always treat each client issue on a case-by-case basis, which includes a thorough investigation to determine the cause of the fraud. ... We do believe that investors have to take some personal responsibility when it comes to protecting their account information.."

This kind of thing worries me. I'm very careful about phishing, online security, but the darn hackers are always one step ahead. Maybe, simply opening a website could install key-logging software or similar, and could potentially defeat all my carefully setup defenses. Yes, this is unlikely if one is very careful, but a reimbursement guarantee would be similar to insurance that we get to protect us from unlikely events.
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jms969
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Re: Vanguard investors have to take personal responsibility

Post by jms969 » Thu Mar 08, 2007 3:14 pm

mudfud wrote:http://www.nj.com/business/times/index. ... xml&coll=5
Excerpt: Records indicate unauthorized trades in one account at Vanguard cost the firm nearly $400,000


http://www.sfgate.com/cgi-bin/article.c ... e=business
Excerpt: ......Vanguard spokeswoman Rebecca Cohen replied in an e-mail. "We always treat each client issue on a case-by-case basis, which includes a thorough investigation to determine the cause of the fraud. ... We do believe that investors have to take some personal responsibility when it comes to protecting their account information.."

This kind of thing worries me. I'm very careful about phishing, online security, but the darn hackers are always one step ahead. Maybe, simply opening a website could install key-logging software or similar, and could potentially defeat all my carefully setup defenses. Yes, this is unlikely if one is very careful, but a reimbursement guarantee would be similar to insurance that we get to protect us from unlikely events.
This is by and far my biggest fear with Vanguard, although my lawyer assures me that we would tie them in knots in a court of law as well as the court of public opinion if they were to not promptly replace funds stolen from an account...

This is an interesting thread on the subject.

http://diehards.org/forum/viewtopic.php?t=65

Cheers,

JMS
I want to die peacefully in my sleep like my grandfather, not screaming like the passengers in his car.

edge
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Security

Post by edge » Thu Mar 08, 2007 4:38 pm

Well, you could run a more secure operating system such as *nix (Linux) where you do not run as root or Windows Vista that will not allow programs to install themselves without notifying you.

I would not worry, just keep your computer clean and only use your home computer to log into your accounts.

chaz
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Security

Post by chaz » Thu Mar 08, 2007 4:56 pm

To defeat keyloggers, download KeyScrambler (a free tool). This gives an added layer of protection.

chaz

Gregory
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mudfud

Post by Gregory » Thu Mar 08, 2007 5:09 pm

Mudfus, as an aside, are you an MD/PhD candidate? "Mudfud" is the nickname we had for those grad students back when I was in school

Greg

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mudfud
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Re: mudfud

Post by mudfud » Thu Mar 08, 2007 5:22 pm

Gregory wrote:Mudfus, as an aside, are you an MD/PhD candidate? "Mudfud" is the nickname we had for those grad students back when I was in school

Greg
Almost correct... The good news is that I survived, graduated, finally got a real job, and am now (among other things) training the next generation of MD/PhDs!

Best,
Mud
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Gregory
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very cool

Post by Gregory » Thu Mar 08, 2007 5:37 pm

That's very cool.

Greg

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kramer
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Re: Security

Post by kramer » Fri Mar 09, 2007 2:44 am

chaz wrote:To defeat keyloggers, download KeyScrambler (a free tool). This gives an added layer of protection.

chaz
Thanks for this suggestion. I just read up on this but have not tried it yet. When I travel, I would like to bring my browser on a USB memory key running portable Firefox from portableapps.com.

However, it looks like Key Scrambler also installs a kernel driver or something, in addition to being a plugin for Firefox, right? I have not downloaded it yet to try it out, but I am curious. But if it requires a separate driver to be installed on the host system, then it would never work portably in internet cafes, for instance.

Kramer

ThinBlueLine
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Re: Security

Post by ThinBlueLine » Fri Mar 09, 2007 11:29 pm

chaz wrote:To defeat keyloggers, download KeyScrambler (a free tool). This gives an added layer of protection.

chaz
Thanks for the tip! Unfortunately, when I downloaded KeyScrambler I had a problem with it closing my browser (Firefox) whenever I tried to send an email. Looks like this was a bug that they claimed to fix in the latest version but I had to uninstall it to use my email. (Merely disabling it didn't do the trick) Anyone else having this problem? I'd love to use the add-on. I was so excited!
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ataloss
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Post by ataloss » Sat Mar 10, 2007 5:14 am

I think the case by case review is reasonable. I can imagine a scheme where the account holder would cooperate with an "unauthorized user" who would get money into a foreign bank. The account holder would then seek reimbursement from Vanguard. The unauthorized user might be the original account holder himself or an accomplice.

shelanman
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Re: Vanguard investors have to take personal responsibility

Post by shelanman » Sat Mar 10, 2007 6:47 pm

mudfud wrote: Yes, this is unlikely if one is very careful, but a reimbursement guarantee would be similar to insurance that we get to protect us from unlikely events.
Out of curiosity... are any of you aware of anyone offering actual insurance for this sort of thing?

What would it cost to insure your portfolio against fraud of this sort?... Of course it is primarily Vanguard's responsibility to keep their system secure, but given their unwillingness to guarantee our protection... can such a guarantee be purchased elsewhere?

Part of me thinks that this sort of thing must be commonplace among people whose account balances have more zeros than mine... at least... if i had a few more zeros, I'd be awfully nervous... but I've never heard of anything.

Just wondrin'

-- Andrew

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Mel Lindauer
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Re: Vanguard investors have to take personal responsibility

Post by Mel Lindauer » Sat Mar 10, 2007 6:55 pm

shelanman wrote:Out of curiosity... are any of you aware of anyone offering actual insurance for this sort of thing?

What would it cost to insure your portfolio against fraud of this sort?... Of course it is primarily Vanguard's responsibility to keep their system secure, but given their unwillingness to guarantee our protection... can such a guarantee be purchased elsewhere?
You may well have identified an area of potential growth for the insurance industry. Considering that they'd only have secondary liability (after the mutual fund company), the price of such insurance might even be fairly reasonable, making it attractive to millions of investors seeking to protect their portfolios.

Regards,

Mel

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