How to Secure Your 401(k) Plan from Identity Fraud
Would you trust your retirement savings to an algorithm? The pros and cons of 'robo advisers' are a topic of debate, but one thing is clear: identity fraud is a growing concern for 401(k) holders. Scammers are well aware that most people don't check their accounts often, making it easier to target them. As you focus on building a nest egg, they're out there coming up with new ways to take it from right under you.
But the risks become even more serious as retirement approaches. You've likely saved up a good sum, but a single successful attack could leave you without your cushion of savings at a vulnerable time in life. Don't worry; you're not defenseless. There are steps you can take to protect yourself and your 401(k).
How Scammers Exploit Your Data for 'Pre-Approved' Retirement Scams
Criminals don't always need to "hack" their way in. In fact, 99% of cyberattacks require you to let them in. Social engineering is a favorite tactic, and you should also be wary of traditional attacks.
- A woman viewing her 401(k) info on her laptop
How to Secure Your 401(k)
It comes down to a few small habits to maintain your digital hygiene. Most of these focus on keeping your sensitive information private and secure.
Data brokers collect and sell this information, making it easier for scammers to target you. Things like your contact details, employment history, address, date of birth, and more are all up for grabs. Here's what I recommend you do:
- Keep your personal information locked down
- Use strong, unique passwords
- Enable multi-factor authentication
- Log in regularly
- Turn on notifications and keep contact details up to date
- Use a VPN when checking your account from a café or airport
- Contact your plan provider immediately
- Notify your employer or plan administrator
- Report the fraud to the government
- Freeze or flag your credit
- Write down everything you know
Your data is the biggest weapon in a cybercriminal's arsenal. Taking it away reduces the risk of ever ending up on their radar to begin with.
Making sure it's unique (never reuse passwords), at least eight characters, and complex makes it much harder to crack. Consider using a password manager, which securely stores and generates complex passwords.
If your provider offers this option, it adds an extra layer of security. Enable it to reduce the risk of password reuse.
Log in about once a month just to see if anything looks off. Many attacks don't result in obvious signs, so it may be too late to notice them unless you're actively looking.
Most providers let you enable alerts for logins, withdrawals, and password changes. This way, if anyone does gain access, at least you'll know.
Cybercriminals can intercept your login credentials or other sensitive information. If it can't be avoided, make sure to use a good VPN to keep the connection secure.
If You Suspect 401(k) Fraud, Act Fast
Speed is everything when it comes to financial fraud. These steps can help stop the damage and improve your chances of recovery:
Call your 401(k) provider and request a freeze or lock on the account to prevent further activity.
If your retirement plan is through your job, loop in HR or your plan administrator right away. They may be able to escalate your case faster.
Place a fraud alert or credit freeze with the major credit bureaus-Equifax, Experian, and TransUnion.
Keep a record of dates, suspicious activity, phone calls, emails, and names of people you spoke with. This information will be critical during any investigation.
Your 401(k) Should Be Building Your Future, Not Funding a Scammer's Payday
While most people check their retirement accounts less often than their email, that's exactly what cybercriminals count on. They're hoping you'll let your guard down. But you have more control than you think. By locking down your personal info, checking your account regularly, and setting up the right alerts, you can stay one step ahead.
A little attention now could save you everything later. If someone drained your 401(k) tomorrow, how long would it take you to notice? Let us know by writing to us at Cyberguy.com/Contact.
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Kurt "CyberGuy" Knutsson is an award-winning tech journalist who has a deep love of technology, gear and gadgets that make life better with his contributions for Fox News & FOX Business beginning mornings on "FOX & Friends."
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