Securing Personal Assets in Today’s Hi-Tech World

On September 7, 2017, Equifax announced a cybersecurity incident, or cyber hack, that could potentially impact approximately 143 million people. 

According to Equifax, the breach lasted from mid-May through July. These sophisticated hackers had access to names, Social Security numbers, birth dates, home addresses and, in some instances, driver’s license numbers.

It is a tale too often seen or heard as of recently on the news. With all of the obvious conveniences that technology provides – buying your coffee on a smartphone app linked to your credit card – access to personal information on the information super highway has the capability of crippling financial health and cause months, if not years, of clean-up and repair.

As technology continues to advance, concerns regarding who has access to personal information and how to safeguard that information will only continue to grow. These issues are often of particular importance to high net-worth individuals and families, especially when personal information is entrusted to a family office or other service provider.

While it may be difficult if not impossible to predict or prevent the next cyber hack, there are measures that can be taken to limit exposure.

Subscribe to a credit monitoring service:

  • Fee-based credit monitoring sites provide services that offer varying levels of protection.
  • These sites monitor activity and send you an alert via email, text message and/or mail if and when your information has been used to open a credit card account, obtain any loan or line of credit or other activity requiring the use of personal information.

Regularly review your credit reports:

  • Equifax, Experian and Transunion, the three major credit reporting agencies, all provide free annual reports. Review the reports to correct inaccuracies:
    • Do you recognize all open accounts?
    •  Is your personal information shown accurate?
  • Run reports for your under-age children or elderly/deceased parent as they are often considered easier targets for hackers.

Monitor your bank and credit card accounts:

  • Do you recognize all of the transactions?
  • Set-up alerts with your institutions – text messages, emails and/or phone call can alert an individual when a credit card is used, a charge over a specific limit has been made or an account balance is below a specified threshold.

Make security a habit:

  • Change passwords every few months.
    • Use unique identifiers and create security questions that are difficult to figure out.
    • Go green - the less mail sent home, often times the better:
    • Turn-on paperless settings and access bank and credit card statements online.

Shred all paper materials with sensitive personal information:

  • Invest in a compact shredding machine or enroll with a shredding company to pick-up and shred sensitive documents.

Lastly, consider placing a credit freeze with all three credit agencies. A credit freeze locks an individual’s credit until that individual unlocks credit access, usually with a PIN or code. Taking such action will deter someone from opening new accounts or taking out a loan under another person’s name. Keep in mind that a credit freeze will not, however, prevent a hacker from making charges to existing accounts.

Related to these security issues is cash management and control. Like cyber security, this is a particularly sensitive issue for individuals and families that have family offices, an accountant or some other individual that handles their finances. To mitigate these control risks, it is critical to have internal controls in place.

Segregation of duties:

  • The person that has signing authority for an account should not also have access to blank checks.
  • A separate person should be reconciling monthly accounts and verifying charges.

Control access to check stock and accounting systems:

  • All checks should be secured.
  • Each user should have unique log-in credentials to access accounting systems.
  • Limit access to areas of the accounting systems. 

Online credentials to existing accounts (bank, brokerage, credit):

  • Do not share online credentials with anyone, including a trusted advisor.
  • If providing online access to a trusted adviser, create a separate view-only access for this person.

Utilizing various technology:

  • Online bill pay:
    • Many banks offer this service for free.
    • Eliminate access to checks altogether.
  • Cash management systems allow for one central location to process bills (via check or ACH) and track payments for a nominal fee:
    • Invoices are maintained in PDF format for future access.
    • Different levels of approval are assigned.
    • Checks are mailed directly from this central location and do not show account numbers or signatures.
    • Set-up recurring vendors, such as utilities, mortgage, mobile phone, etc. to be automatically paid with a bank account or credit card.

Although there is no way to completely insulate oneself from these issues in today’s world, any of the steps above will help in securing  assets and may prevent  information from falling into the wrong hands.