Safeguard Investment Accounts From Identity Theft

It was two months ago on a Sunday when my friend called me, panicking. She frantically described how her elderly father had just given out his personal information over the phone to some scammy caller.

The caller had convinced him that his daughter was injured and they will need his personal information to disclose further details. He unfortunately provided the caller his name, social security number, date of birth, address, and maybe some more information as well.

He had been a victim of identity theft! Down the sink went the rest of the iced coffee I’d been sipping. This was scary!

She called me as she knew I have experience with these types of matters and asked me, how to proceed?

Her father, Leon, has a lot of money stored in his bank accounts and investment accounts and that was her primary concern.

A look Into Identity Theft

Both my friend and I knew that identity theft has taken a rise over the last couple of months.

Scammers are taking advantage of the increase of information being shared through cyberspace and are hacking into people’s accounts.

But to have someone so closely related attacked?!

She reached out to me as a friend but being that I have experience in such matters, I got into strategy mode.

I wasn’t too concerned about Leon’s bank accounts. Bank accounts are all protected by law.

But you do need to act fast. Federal banking regulations protect victims of identity theft.

If you report the theft within two days of receiving your statements, then you’ll be protected with your liability capped at $50, but, if you wait a third day before you report the theft, then your liability jumps up to $500.

So as you see, promptly reporting a fraudulent transaction will be a big factor in the level of protection you’ll get.

I advised my friend to immediately freeze her father’s credit reports to avoid any new tradelines being opened in his name.

But what I was getting concerned about was Leon’s investment accounts

A Deeper Look Into Investment Accounts

The one thing though that did niggle at me, was Leon’s investment accounts.

He’s a retired engineer who relies on his investments to sustain him. I wasn’t sure what happens once that is touched by thieves.

I got off the phone with my friend and sat down to get Google to help out.

After doing some research on identity theft and investments, I was even more so concerned.

According to the information I’d gleaned off the web, investment accounts, unlike regular bank accounts, are generally not protected from identity theft.

But there was some hope. Some brokerage firms do offer protection.

Some examples would be Fidelity, Charles Schwab, and Robinhood. Vanguard offers protection as well but on a very limited bases.

A return phone call to Leon’s devoted daughter, and a phone call to Leon himself, allowed me to breathe more easily.

Leon had investment accounts with Fidelity, may he be blessed. From the research I’d done, different accounts have different policies. FIdelity came in first for the best coverage!

We immediately got in touch with Fidelity to report the scam which had taken place that morning.

The rep at Fidelity complimented us for reporting so quickly.

The rep quickly took some extra precautions to secure the accounts even more, including two-factor verification, blocking withdrawals to un-linked accounts, and more.

The important lesson I walked away with on that Sunday, was that there are plenty of brokerage firms out there.

The way to choose one for yourself is by picking a firm that offers coverage on identity theft.

Had we not been that that lucky, Leon could’ve been completely drained of his investment accounts.

You can view identity theft coverage policies on your brokerage firm’s website.

Here are links to some of them :

• Fidelity
• VanGuard
• Charles Schwab
• AmeriTrade
• Robinhood

To Tackle The Other Accounts

Now that his investments were taken care of, I once again guided my friend and her father through the process of dealing with some of his other financial accounts.

• Medical insurances: Leon had to notify his doctors of the possible invasion in his medical files. The hackers may bill for a non-eligible service or add medical procedures to the file which were never done. All this would possibly lead to medical collections on his credit report. Plus, doctors have to be extra cautious when reviewing his medical history as it may contain errors from medical conditions not belonging to him.
• Bank accounts: I made sure Leon had notified his bank and told him to set up monitoring for fraudulent activity on his account. This would alert him of suspicious activity or transactions on his account. He’s already super careful to review his excellent bank statements.
• Tax Fraud: Leon may be eligible to receive an IP PIN from the IRS.An IP PIN will protect Leon’s tax return so thieves cannot file a false tax return in his name.

A Sigh Of Relief

The way my Sunday afternoon back then panned out was completely out of the plan, but being of help to my friend and her father filled me with a feeling of true satisfaction.

I was glad to have been able to step in at the right time.

Taking care of identity theft damages straight away was what caused Leon to get away with minimal damage.

Never give over personal information by phone unless you are the one to place the call to the brokerage firm, bank, etc.

If it does happen that you are a victim of a scam, now you know what to do.

The biggest relief of all was that the coverage on Leon’s investment accounts saved him.

It is so important to go with a brokerage firm that offers coverage. Good thing for Fidelity.

May we all stay safe.