Find out how Vanguard protects your personal information

Vanguard protects its investors by using many different tactics, including multifactor authentication, security codes, and limiting the number of log on attempts.

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Emily Farrell: David from California asked, “How can I protect my account to avoid hacking?” Jeff, I mean there’s probably a lot there, so maybe we need to unbundle it a little bit.

Jeffrey Lampinski: I like to use the analogy: view your account as you would your home. So you want to put good, preventive controls at the front door; at the front door, on the windows. You want to make sure you have very good, secure controls, a good deadbolt on your front door, for example. That’s what Ellen was referring to when she got into the authentication strategy. You want to have a unique user ID. You want to have a very strong password, 6 to 20 characters, alphanumeric, uppercase, throw in some special characters. You want to subscribe to that multifactor authentication. You might want to consider the security key. All of those I consider the front-door preventive controls to keep the bad actors out of your house, keep them out of your account.

God forbid they get in, you want to have very good detective controls now within your home. So if somehow a bad actor was able to get into an account, you want those detective controls we just discussed, those account activity alerts. You want to know that like a bad actor might be moving around your home and a motion detector would alert. You want to know that they’re moving around within your account. They’re changing your email address. They might add a bank. They may try to make an exchange or a redemption. So that’s the best way I think in my opinion to fortify your accounts.

And while I’ve said all that, just be vigilant. It’s one thing to sign up for the account alerts and then not pay attention to them. If you’re going to sign up, be very vigilant. It requires a little bit of work, but an ounce of prevention is worth a pound of cure in this space. 

Ellen Rinaldi: So if he gets hacked, then there’s a method. There’s a couple things he should be doing. He certainly should be calling us because we’d lock down his account. He should be calling other financial institutions because if there’s an issue with one financial institution, there’s likely an issue with another because many people use the same user names and passwords for all their financial services accounts regardless of how many times we ask them not to do that. And then they need to report it. Right?

Jeffrey Lampinski: Yes, that’s right.

Ellen Rinaldi: And they would go to the FTC for that.

Emily Farrell: Which is?

Jeffrey Lampinski: It’s a fantastic resource. The Federal Trade Commission.

Jeffrey Lampinski: Probably one of the best resources on identity theft. Go to something specifically identitytheft.gov. It’s connected to the FTC. But if someone does actually compromise an account and get into your account, you can logically say you’re the victim of identity theft because they have enough of your ID to access your account. And so as Ellen indicated, there are certain remedies available. If that happens, you can go to any one of the consumer credit reporting agencies and report that you’re the victim of identity theft. You can ask that they put a 90-day initial fraud alert on your account. If they do that and someone tries to apply for credit in your name, they have a requirement to actually call you and verify that it is you applying for credit.

If you’ve actually been the victim of identity theft—where this would be a case where you have been—you could actually have a seven-year fraud alert put on your account. It entitles you to six free credit reports, two from each of the credit consumer reporting agencies, and you can go so far as if you want to freeze your credit. It’s very powerful actually freeze your credit so that even you cannot apply for credit. It is frozen. I think there’s a small fee—It depends upon each state—It might be $10 to unfreeze the credit. But if you don’t expect to use your credit for any length of time, it’s a very good option to protect your credit.

Emily Farrell: So that’s actually a great point, and I remember that we have a viewer submitted question about this. So I guess you’re talking about a credit lock?

Jeffrey Lampinski: Credit freeze, yes.

Emily Farrell: Yes, “So I have a credit lock at all three credit reporting agencies. Am I safe if my identity is stolen?”

Ellen Rinaldi: Only partially. Right? As to applications for credit, yes.

Jeffrey Lampinski: No one’s going to obtain credit in your name.

Ellen Rinaldi: But as to any of the rest of your information—your health information, etc.—that still could be open to being used by one of the bad actors. So that locks down a piece of it. And as we’re talking about freezing credit, etc., you’ve got an 11-month-old, right?

Emily Farrell: I do, yes.

Ellen Rinaldi: That 11-month-old has a Social Security number, right?

Emily Farrell: Yes, he does.

Ellen Rinaldi: You might think about locking his credit.

Emily Farrell: Yes, well that’s a great point.

Jeffrey Lampinski: Defensively, yes. Lock it down.

Ellen Rinaldi: Defensively. Now there is absolutely no reason why his credit should be – his name. He’s got a name. He’s got an address. He’s got a Social Security number.

Emily Farrell: Yes, that’s a good point.

Ellen Rinaldi: There’s information about him probably on Facebook, etc. Doesn’t hurt until they’re at an age where they can use it.

Emily Farrell: That is a great tip and, hopefully he’s not opening any credit cards at least personally.

Ellen Rinaldi: I hope not. Not yet.

Jeffrey Lampinski: Just to follow-up to Ellen’s point, just freezing credit or even going to the credit bureaus for a fraud alert is not sufficient. To really protect yourself fully against identity theft, you do have to go to your other financial institutions. You do have to change your user ID and password at those institutions.

A lot of that I have a guide here. And this is probably the only hard copy in existence any longer. It’s old. I don’t let it out of my hands. But this is probably one of the best resources I’ve ever seen on how to respond if your identity is stolen. It’s now available in a PDF format if you simply search this title Take Charge: Fighting Back Against Identity Theft if you want a soft copy. But if you go to identitytheft.gov, it is all there now automated so in the event you want to report you’re the victim of identity theft, it takes you now digitally and logically through this entire process.

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