Anthem Customers – No, Everyone – Protect Your Accounts

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In the time it takes you to read this sentence, all the money you have saved in your 401(k), mutual funds or back accounts could vanish. Not into thin air of course, more likely into the pocket of a cyber-thief who secretly gained access to your personal information. But as quickly as that money can disappear, you can also protect yourself against this type of fraud.

Cybercrime has been in the news recently as criminals breached the credit and debit databases of big name retailers like Target (TGT) and Home Depot (HD). However, despite the visibility of these incidents, very few customers of either store suffered any damage because the information the thieves accessed was somewhat limited. But the latest hack into Anthem’s (ANTM) customer records has put millions of consumers at a much greater risk.

A Different Type of Data Breach

What makes the hack at Anthem so disturbing is that the crooks also obtained basic birthdays, email addresses, Social Security numbers, employment history, current and prior addresses and annual incomes. With this information, it is very easy to target wealthy individuals, log on to their financial accounts and initiate fund transfers to illegitimate — and usually offshore — accounts.

What’s worse is that there is no remedy available for victims of this type of fraud. Even though FIDC and SIPC insurance covers bank and brokerage accounts against institutional failure, they don’t cover this type of cybercrime. This is why you need to protect yourself.

Make It Impossible for the Bad Guys to Win

The most important thing you can do is to set up two-factor authentication — or 2FA, as it is known in cybersecurity circles –- which creates up an extra authentication step in your log-in procedure. Without 2FA, your username and password are your single line of defense against unauthorized access.

With 2FA enabled, a second, almost unbeatable factor is added to gain access. That extra factor can be a text message sent to your phone containing a special one-time code that you have to enter to access your account. Since most people realize very quickly the loss of their phone and take immediate steps with their carrier to have it disabled, it makes defeating this type of 2FA unlikely.

Technology on the Consumer’s Side

Some financial institutions — such as Vanguard, which has over $3 trillion in assets under management — have taken the 2FA concept in the direction of science fiction. Using extremely sophisticated voiceprint technology, Vanguard customers can record a short phrase that becomes linked to their accounts and must be replicated to have any transactions approved.

This makes illicit activity in your account almost impossible since the criminals would have to have all your personal information and a recording of your voice. Higher-tech forms of 2FA used at other institutions include fingerprint readers and optical scanners that scan the iris.

Increasingly, consumers will be prompted to set up 2FA on their accounts, but it is far from commonplace, so contact your financial institutions and ask them how you can set up this extra layer of protection so that you don’t fall victim to cyber theft.

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