Cyber Crime – What Precautions Protect my Savings?

It happened more or less like this. The email arrived at Rock Point’s office very late on a Friday afternoon from Abby*, a longstanding client, or so it appeared. It was a continuation of a prior email chain — we instantly recognized our exchange about Abby’s IRA from a few weeks earlier. “Abby” seemed like her usual self, offering the team warm greetings, before requesting a wire transfer from her account to a “luxury car dealer” a dozen states away.

It turns out that this was an impostor seeking what is known as a Third-Party Wire Transfer Request. In this case, it was a request that Rock Point contact the custodian of Abby’s account (Schwab) to arrange for money to be transferred electronically to a designated third-party beneficiary. Wire transfers are a convenient way for people to move around large sums of cash and to pay for large ticket items, transactions beyond the scope of what most merchants will accept on a credit card. Unsurprisingly, fraudsters see large potential returns for themselves in illegally diverting money in this manner.

Fortunately for the real Abby, the matter stopped there. As an investment advisor, Rock Point shares responsibility with our clients’ custody banks to verbally confirm any wire transfer instructions we receive from clients. As you are probably suspecting at this point, our phone call to Abby found her at home — and not shopping for a BMW halfway across the country.

Cyber crime has become an unfortunate and challenging part of our lives today. While a crisis was averted, Abby cannot be complacent. After a fraud attempt, we can help notify and collaborate with brokers, banks or custodians to ensure the proper next steps are taken.

Working with Schwab, we are advising Abby to:
• Change her email password and consider establishing a new email account
• Perform a full virus scan on her computer
• Notify her email provider of the incident
• Periodically check her credit report with one of the credit bureaus
• Continuously review all of her financial statements for fraudulent charges (brokerage, bank, credit cards, etc.)

The entire financial industry must engage in a continuous process to try and stay one step ahead of the ever more brazen and creative tactics employed by cyber criminals. When process changes result in delays in getting things done, please understand that they are for your protection. Depending on the type of transaction, you may receive a phone call, like our conversation with Abby, as an additional step to confirm your identity.

We would also like to take this opportunity to encourage you to use secure portals whenever possible to transmit and receive sensitive financial information. We can assist you in setting up your credentials to use our secure portal on the Rock Point website. And, by all means, please do not disclose account numbers or your social security number in any emails or attachments. Finally, please do share plans you have to make any large purchases and any breaches you have experienced in other parts of your financial life in order that we can all exercise extra vigilance to protect your assets.

*Not her real name.