News & Insights

Avoiding the Web Can Be Bad For Your Financial Health!

by Chris Jaccard, CFP®, CFA on 7/23/2018

With cybercrime constantly making headlines, it’s no wonder that some people have resorted to avoiding the web altogether as a way to prevent exposure to this risk.

Think again.

Unfortunately, the premise that you can’t be hacked because you haven’t set up online accounts with your bank, utility company, brokerage firm, etc., isn’t a sound one anymore. Many years ago this may have been true, but the unfortunate reality is that nowadays there is nowhere to hide from cybercrime.

The Allure of Anonymity

Despite the advantages that our cyberconnected world has delivered to our doorstep, it seems like this change isn’t one that people welcome with complete open arms.

According to a study by Pew Research Center, 86% of adult internet users have resorted to tactics to enable them to travel the web incognito. Examples include clearing or disabling cookies, trying to mask your identity, using a fake name, or using an anonymous browsing service (as per Rainie et al, 2013). It’s clear that most people have a desire for more online privacy.

Technology can empower our lives and strengthen our ability to connect with the people and things that we want in our lives. Yet there is a price for this progress. In today’s world it seems as if everything is connected to the internet somehow. As far as we’ve come, however, we’re still in the dark about controlling the flow of information so that it doesn’t get into the wrong hands in the midst of all of this.

Nowhere to Hide

Cybercrime is now so advanced that identity thieves have the ability to actually set up online accounts for you.  Believe it or not, they can hack into or buy personal data that is needed to set up your online persona – social security numbers, birthdays, addresses, and mobile phone numbers. It’s possible that your data may be exposed by your association with another person or with an organization that you are a member of.

Avoiding social media accounts doesn’t help either – there’s enough information available to set up fake accounts in your name on Facebook, Twitter, or any other platforms. While having a false social media account set up in your name may seem inconsequential, social media does have more of an influence on society than you may think.

For example, employers often will conduct research on a candidate by looking at their Facebook page. Social media accounts are very often linked with job application sites so that people can apply for jobs using their Facebook or LinkedIn profiles. Social media can be the first step in a hacker structuring a pseudo profile that can be used to steal your identity – with billions of users worldwide, it’s not a frivolous thing anymore.

Taking a Lesson From the Younger Generations

Has the student become the teacher?

Many members of the less internet savvy generations just won’t get around to opening accounts. It’s important for their loved ones/others to set up and maintain online accounts, even if they will never be used.

While it is typical for younger adults to be more open to the internet than their more senior counterparts, the studies from Pew Research referenced above also show that younger adults are more likely to take precautions to protect themselves than their elders (as per Rainie et al, 2013).

This influences the roles that family members play in the family’s financial wellbeing. The younger members of a family may be called upon to not only set up and administer their family’s online accounts, but also are more likely to be the ones to protect them.

Preventing Elder Abuse

In other articles we’ve mentioned the role of the trusted contact in preventing elder abuse. Trusted contacts should be made aware of their relative’s online presence. This is especially important as the internet very often plays a role in financial exploitation.

Establish a trusted contact that your account custodian or financial advisor can reach out to in any cases where he or she believes that your or your relative may be a target of elder abuse of any kind, cyber-related or not.

Please read “What You Need to Know About Preventing Elder Abuse.”

What You Can Do About It

In our practice as financial advisors, we handle client sensitive information every day. As a result we’ve come to know of the tools that people can use to protect themselves. As a matter of course, we recommend the following general precautions be taken:

  • Place a security freeze on credit files which credit bureaus such as Experian to obtain your authorization to release a credit report.
  • Add customer PIN number/password for phone service
  • Document passwords in a safe yet accessible space
  • Add two factor authentication to bank accounts/credit cards

With the proliferation of apps and new software available through the mobile phone, most people have more passwords than they know what to do with. Companies such as 1Password or LastPass offer tools to manage these data in a secure and centralized way to help eliminate the hassle and time of having to run around searching for them.

Summary

The sad reality is criminals have a lot of personal information already, and only need a few bits of information to successfully hack an account. It’s now the responsibility of internet savvy people to ensure their friends and family members are protected. There are also various precautions such as password management tools, security freeze for credit files, etc., that may help protect you from this risk.

Sources

Rainie, Lee, Kiesler, Sara, Kang, Ruogu, and Madden, Mary. (5 September, 2013) Anonymity, Privacy, and Security Online.  Pew Research Center. Retrieved from http://www.pewinternet.org/2013/09/05/anonymity-privacy-and-security-online/.

posted in BlogGeneralPersonal Finance

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Posts are general in nature and do not constitute the rendering of legal, investment, accounting or other professional advice.