Account Fraud

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rustinchole
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Account Fraud

Post by rustinchole » Fri Jan 12, 2018 1:02 pm

In the event of someone illegally accessing my investment accounts at Vanguard and draining them what are my potential options (hypothetical). Of course for a bank account you will be refunded but what about investments? Does Vanguard investigate and reimburse? Do they look to see if the theft was in part caused by the account holders negligence?

Thanks for all you do guys, never not been able to find help in this place.

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Pajamas
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Re: Account Fraud

Post by Pajamas » Fri Jan 12, 2018 5:33 pm

Vanguard provides some information about this:

https://personal.vanguard.com/us/help/S ... ontent.jsp

The details are important.

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bligh
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Re: Account Fraud

Post by bligh » Fri Jan 12, 2018 5:45 pm

Setup account alerts to email and text you on any and all account activity. As a Boglehead this activity would be quite limited.

I have it setup that way, and it helps me sleep soundly at night. In general it is a good idea to have something like this on all your accounts. That way you can instantly call the brokerage as soon as any activity is initiated.

rustinchole
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Re: Account Fraud

Post by rustinchole » Fri Jan 12, 2018 11:48 pm

Reading through that link has not assuaged my fears. This line about only refunding if the loss isn't in some way my fault is particularly concerning.

"This protection does not apply to unauthorized activity caused in whole or in part by your fraudulent, intentional, or negligent acts or omissions, including activity by a person whom you have intentionally or negligently permitted to transact in your account, or to whom you have intentionally or negligently given access to security information relating to your account."

Of course if someone has my information it's going to be due to my own negligence right? There is always more I could do to protect it so it would not be hard to put fault on the account holder for not doing absolutely everything possible. I'd like to know how vanguard defines negligence in this sense, do you think calling in and talking to legal would be of any use or am I way over thinking this? We spend so much time mitigating against investing risks I'd hate to lose it all to my own carelessness. I do have the email alerts set up, I'm going to step up my security with the two factor identification though.

MikeG62
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Re: Account Fraud

Post by MikeG62 » Sat Jan 13, 2018 9:08 am

rustinchole wrote:
Fri Jan 12, 2018 11:48 pm
Reading through that link has not assuaged my fears. This line about only refunding if the loss isn't in some way my fault is particularly concerning.

"This protection does not apply to unauthorized activity caused in whole or in part by your fraudulent, intentional, or negligent acts or omissions, including activity by a person whom you have intentionally or negligently permitted to transact in your account, or to whom you have intentionally or negligently given access to security information relating to your account."

Of course if someone has my information it's going to be due to my own negligence right...or am I way over thinking this?

I do have the email alerts set up, I'm going to step up my security with the two factor identification though.
While IANAL, I do not think your statement is correct - may not be due to your negligence at all - and, yes, I believe you are over thinking this.

Of course, these thing are always facts and circumstances dependent. However it seems to me that if you take reasonable steps to protect your accounts, including the use of 2FA as well as alerts (whether by e-mail or text) anytime any money is moved out of your account (and react promptly to any such alerts), then you are doing the things a reasonable and prudent person would/should do to protect their account from unauthorized access.
Last edited by MikeG62 on Sun Jan 21, 2018 11:09 am, edited 1 time in total.
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stan1
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Re: Account Fraud

Post by stan1 » Sat Jan 13, 2018 9:21 am

rustinchole wrote:
Fri Jan 12, 2018 11:48 pm

"This protection does not apply to unauthorized activity caused in whole or in part by your fraudulent, intentional, or negligent acts or omissions, including activity by a person whom you have intentionally or negligently permitted to transact in your account, or to whom you have intentionally or negligently given access to security information relating to your account."
What we don't know is whether Vanguard would consider putting your password into a password manager or account aggregator such as Yodlee or Personal Capital as negligent. I'd make the argument that using password managers is a widely recommended best practice by cybersecurity "experts" as a way to manage using a randomly generated, unique password on each site therefore not negligent but I'm not an attorney and I haven't had to hire one to make this defense. I'd note that there is no body of experts saying its a good idea to put your login credentials into an account aggregator (although Vanguard did offer Yodlee as a service via its own website for external accounts at one point -- I don't think new customers can use it any longer).

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oldcomputerguy
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Re: Account Fraud

Post by oldcomputerguy » Sat Jan 13, 2018 9:40 am

bligh wrote:
Fri Jan 12, 2018 5:45 pm
Setup account alerts to email and text you on any and all account activity.
Vanguard allows you to set up alerts for:
  • Add, edit, and delete linked bank accounts
  • A password is changed, a security question and answer are changed, or my password is locked on the web or through an app.
  • Buy, sell, and exchange Vanguard mutual funds
  • Buy, sell, and exchange non-Vanguard mutual funds
  • Brokerage trade execution notices
  • Initiated, in progress, and completed status messages for asset transfers
  • Reminder and confirmation text messages when you have appointments with us.
The first five let you set alerts via email and/or SMS text. The next-to-last (asset transfer status messages) can be set only for email alerts, while the last (appointment reminder) can only be set for SMS text.

I personally have all the check boxes set except for the last one, since I don't expect I'll have an appointment with someone from Vanguard any time soon.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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nisiprius
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Re: Account Fraud

Post by nisiprius » Sat Jan 13, 2018 9:56 am

Keep in mind that Vanguard is not like PayPal or a bank bill-paying service. It is not designed to move money between two different people. Let's suppose a hacker got access to my account. What, exactly, could he do apart from causing vandalism or mischief just for the heck of it?

He could initiate transfers between my Vanguard account and my own bank accounts. What good does that do him?

Of course there are processes for linking new bank accounts to a Vanguard account, but they are intentionally slow and cumbersome, involving mail and paper and physical addresses. Whenever I've done it, it has involved Vanguard mailing me a letter at my physical address informing me of the change, and the time taken to activate the link is long enough to be reasonably sure I've received the letter. The hacker would be exposed to the possibility of discovery for something like ten days.

The only scenario anyone has mentioned for a hacker being able to rob me quickly and at low risk is to commandeer my account and have me buy a worthless penny stock that the hacker is pumping, driving the price up at the same time as he sell his own holding.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

rustinchole
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Re: Account Fraud

Post by rustinchole » Sat Jan 20, 2018 10:26 am

Thank you everyone for the feedback. I've opted to set up texting alerts every time I long in and that helps me sleep at night. Thanks again for your help ,I sure do love this forum.

ccieemeritus
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Re: Account Fraud

Post by ccieemeritus » Sun Jan 21, 2018 4:28 am

I recommend 2 factor authentication for all “money” accounts. I find text messages to my cellphone convenient for the 2nd factor.

InvisibleAerobar
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Re: Account Fraud

Post by InvisibleAerobar » Sun Jan 21, 2018 6:50 am

Not to be glib, but what happens when the cell phone gets compromised? also, would folks here recommend that financial apps should not be installed on phones receiving text messages from financial institutions?

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nisiprius
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Re: Account Fraud

Post by nisiprius » Sun Jan 21, 2018 7:38 am

InvisibleAerobar wrote:
Sun Jan 21, 2018 6:50 am
Not to be glib, but what happens when the cell phone gets compromised? also, would folks here recommend that financial apps should not be installed on phones receiving text messages from financial institutions?
Beats me. I have been putting up strong resistance to putting any financial apps on my smartphone, but the pressure to do so is inexorable and sooner or later I will cave. Capital One 360 has already discontinued their longstanding capability of depositing checks (via scanned image) from a desktop computer. You can't do it. Their only answer is "use our smartphone app" or "go to a Capital One physical bank, which in your cases is conveniently located only forty miles away, plus you can buy Peet's Coffee at half-price while you're there."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

seawolf21
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Re: Account Fraud

Post by seawolf21 » Sun Jan 21, 2018 1:29 pm

InvisibleAerobar wrote:
Sun Jan 21, 2018 6:50 am
Not to be glib, but what happens when the cell phone gets compromised? also, would folks here recommend that financial apps should not be installed on phones receiving text messages from financial institutions?
You should be password locking your phone.

Seriously, hackers would get better returns hacking bitcoin exchanges than a random individual's accounts.

tibbitts
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Re: Account Fraud

Post by tibbitts » Sun Jan 21, 2018 1:41 pm

rustinchole wrote:
Fri Jan 12, 2018 1:02 pm
In the event of someone illegally accessing my investment accounts at Vanguard and draining them what are my potential options (hypothetical). Of course for a bank account you will be refunded but what about investments? Does Vanguard investigate and reimburse? Do they look to see if the theft was in part caused by the account holders negligence?

Thanks for all you do guys, never not been able to find help in this place.
Why do you think your bank account losses would be automatically refunded? I believe you'd be in the same situation either way.

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fortfun
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Re: Account Fraud

Post by fortfun » Sun Jan 21, 2018 1:51 pm

Besides text alerts, you need to use a good email service provider (i.e. Gmail NOT Yahoo) and make sure that you set it up with 2 factor authentication. If your email get's hacked, hackers can gain access to accounts that utilize it (fairly easily). I can't believe the number of people that still use crappy email providers (yahoo, etc) for their banking.

golfCaddy
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Re: Account Fraud

Post by golfCaddy » Sun Jan 21, 2018 2:10 pm

This is all going to be speculative until there are real life examples and court cases. There's a lot of different ways any investment manager could blame the customer. You're running OS 14x, when you should have upgraded to the more secure OS 15x. If your smartphone is too old to be upgraded to OS 15x, then that's your fault for not buying a new smartphone every 5 years.

KATNYC
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Re: Account Fraud

Post by KATNYC » Sun Jan 21, 2018 2:44 pm

oldcomputerguy wrote:
Sat Jan 13, 2018 9:40 am
bligh wrote:
Fri Jan 12, 2018 5:45 pm
Setup account alerts to email and text you on any and all account activity.
Vanguard allows you to set up alerts for:
  • Add, edit, and delete linked bank accounts
  • A password is changed, a security question and answer are changed, or my password is locked on the web or through an app.
  • Buy, sell, and exchange Vanguard mutual funds
  • Buy, sell, and exchange non-Vanguard mutual funds
  • Brokerage trade execution notices
  • Initiated, in progress, and completed status messages for asset transfers
  • Reminder and confirmation text messages when you have appointments with us.
The first five let you set alerts via email and/or SMS text. The next-to-last (asset transfer status messages) can be set only for email alerts, while the last (appointment reminder) can only be set for SMS text.

I personally have all the check boxes set except for the last one, since I don't expect I'll have an appointment with someone from Vanguard any time soon.
+1
Not sure if Vanguard has this feature but if someone did get access to my Citibank account to make changes (like updating the email address/number), they could not even make any transfers for several days after updating. This just happened to us last week since we updated a cell phone number (home versus work). Moreover, it takes several days and micro deposit verification to add a new transfer account.

afatcat
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Re: Account Fraud

Post by afatcat » Sun Jan 21, 2018 5:12 pm

I use a Chromebook to access my account, so can't run antivirus/antispyware as they specify. I've wondered if they could use that technicality as a way to get out of paying a reimbursement, even though a Chromebook is arguably more secure than a PC as CB's are inherently antivirus/antispyware. I hope they would account for the fact that I take steps to be secure, even more so, just not one they explicitly mention.

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oldcomputerguy
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Re: Account Fraud

Post by oldcomputerguy » Sun Jan 21, 2018 6:06 pm

afatcat wrote:
Sun Jan 21, 2018 5:12 pm
I use a Chromebook to access my account, so can't run antivirus/antispyware as they specify. I've wondered if they could use that technicality as a way to get out of paying a reimbursement, even though a Chromebook is arguably more secure than a PC as CB's are inherently antivirus/antispyware. I hope they would account for the fact that I take steps to be secure, even more so, just not one they explicitly mention.
I wonder the same thing here. All my financial activity is carried out on my home Linux Mint machine (which, by the way, is the latest version available and is fully patched).
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

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oldcomputerguy
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Re: Account Fraud

Post by oldcomputerguy » Sun Jan 21, 2018 6:08 pm

fortfun wrote:
Sun Jan 21, 2018 1:51 pm
Besides text alerts, you need to use a good email service provider (i.e. Gmail NOT Yahoo) and make sure that you set it up with 2 factor authentication. If your email get's hacked, hackers can gain access to accounts that utilize it (fairly easily). I can't believe the number of people that still use crappy email providers (yahoo, etc) for their banking.
Just to note, if one uses Gmail, it can be set up for 2FA using Google Authenticator and not have to worry about one’s cell phone being “socially engineered”.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

likegarden
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Re: Account Fraud

Post by likegarden » Sun Jan 21, 2018 6:44 pm

I went back to use my PC for financial interface, but run ahead of that first Malwarebytes and Webroot to make sure no malware is in my computer.

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