My apologies if this has been posted already. Very disturbing story nonetheless. What is your take on managing your retirement accounts online, and do you think that account holders should be liable for fraud committed against their accounts? From reading this article, it seems that if the bad guys don't get caught, you don't get your money back.
The online brokerage I use -- Fidelity -- states:
"As part of our ongoing commitment to our customers, we're proud to offer our Customer Protection Guarantee: We will reimburse your Fidelity account for any losses due to unauthorized activity."
The fine print seems reasonable and what I would expect.
But that article did lead me to check on that.
--ron
There is something fishy about this story. I know when I add a new bank account to my investment accounts, it takes days to do the verification deposits. For Vanguard, they mail me a pin code I must enter to validate it for withdrawals. And this is a 401K where there are all sorts of laws that limit when you can take money out. The hacker strikes when the person coincidentally heads off to China -- screams inside job -- either at JPM or somebody who knows him.
I went through this with T Rowe Price today. I changed my account used for systematic purchase (savings instead of checking). To do this I needed a deposit ticket and a stamped guarantee from bank trustee.
T Rowe told me it would take ~5-10 days to change bank info when I called ahead of time. They received paperwork 5 days ago, I was called yesterday. The issue was the name on the T Rowe account did not match the name on my bank account. Jim/James simple mistake... but T Rowe caught this.
In addition Vanguard has an added security on 401k access. I see a picture each time I login to verify I am on their web site and no "trojan horse" is tracking the login.
On the other side of the equation, the banks are also getting more diligent. I'm in the process of setting up a linkage from a brokeage account to a Wells Fargo bank account, and the bank mailed me a letter telling me that the brokerage was trying to set this up, and if that's not correct, I should notify WF. And WF is holding this up for a few days in case I should want to tell them to disallow it.
On the other hand, Wells Fargo Brokerage just debited a checking account (outside of WF) without my authorization. I had submitted a form that allowed them to do a one-time ACH to fund the account, but not to establish an ongoing link. They were able to grab some more money anyway. At least the money was taken by "me" :-). (Also, I caught it the day they did the transfer.)
Mark Freeland snipped-for-privacy@sbcglobal.net
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