Important Steps to Protect Yourself from Fraud

Written By Pat Cornelius

Every week, it is reported that a data company, bank, credit card or government agency has been breached, allowing hackers to access a large number of individuals' nonpublic personal information, including Social Security numbers, current and past addresses, and other information.

While reports are never specific about exactly who was affected, these incidents are another reminder to always stay vigilant against potential fraud attempts.

To help you safeguard yourself against these types of criminal behavior, below is some information we want to share.

How do they do it?

Fraudsters may contact you via email or phone and indicate that your account has been compromised and they need some specific account information to remedy the situation. Some examples:

  • Some fraudsters send an email to alert you to a subscription renewal (that you never actually subscribed to) that will automatically charge you if you don’t cancel it. It is a natural reaction to quickly click the link to cancel the subscription. If this is a fraudulent email and you click the link, you could be subjecting your computer to a virus or malware.

  • Fraudsters can override caller ID and make it look like they are calling you from wherever they want. If a caller ID shows that the call is coming from a company you know, like Schwab, tell the caller that you will call them back to verify the caller is who they say they are. (But don’t call their number; call the number on your statement.)

  • A fraudster may call or email you, posing as a member of your banking or investment institution (or even your family, replicating a family member's voice using artificial intelligence), regarding an existing issue with your account. They'll tell you the only remedy is to wire funds via instructions they provide you or ask you to deposit money to a specific ATM. Once you complete the transaction, the money goes to an account they can access, and you'll never hear from them again.

What can you do to prevent fraud?

While we work hard to stay abreast of the latest scams to which our clients may be subjected, there are important steps that you can take to prevent fraud on your accounts, whether at Schwab, another financial institution, or a credit card company.

We strongly recommend that all clients add the following three features to their Schwab accounts if they haven’t already done so. All three can be added by contacting the Schwab Alliance Team at 800-515-2157.

1. Voice ID: Add voice recognition to your Schwab accounts as another means of authentication if you were to call Schwab.

2. Two-Step Verification: Add an additional layer of security, which requires you to enter a unique security code each time you access your Schwab accounts.

3. Security Alerts: Set up security alerts to receive immediate notifications when activity occurs in your accounts

Remember that Schwab provides you with the Schwab Security Guarantee, meaning that Schwab will cover 100% of any losses incurred in any of your Schwab accounts due to unauthorized activity not conducted by the client.

To maintain online security for any account that includes your personal information, we recommend the following:

Login credentials:

  • Do not use personal information such as your Social Security number or birthday as your login ID.

  • Create a unique password (using letters, numbers, and symbols) for each financial institution and change it frequently. Consider using a password manager with secure encryption to create, manage, and store unique and secure passwords.

  • NEVER (EVER) share your passwords.

  • Use two-step verification whenever possible.

Email/Text:

  • Do not click on links or attachments in emails and text messages if you question the sender’s validity.

  • Treat email like a postcard. If you don’t want everyone to read it, don’t put it in an email. If you must send secure documents, use our secure online portal to upload them to us securely.

  • Be suspicious of unexpected or unsolicited phone calls, emails, and texts asking you to send money or disclose personal information. If you receive a suspicious call, do not accept it; hang up and call back using the vendor's known contact number.

Do not disclose personal or sensitive information on social media sites.

Avoid using public computers. Use your personal Wi-Fi hotspot instead of public Wi-Fi.

Keep your web browser, operating system, and anti-virus program up-to-date.

Consider an identity monitoring service. These firms monitor your personal information such as bank accounts, Social Security Number, driver’s license, passport, or medical ID number. They alert you when your information appears in public databases such as change of address requests, court or arrest records, orders for new utility, cable, or wireless services, check cashing requests, and social media websites that identity thieves use to trade stolen information.

Sharing private personal information: Some financial companies must share personal information to run their everyday business. Federal law, however, gives you the right to limit this sharing of information. Therefore, another good practice is to opt out of information sharing whenever that option is offered. With respect to Charles Schwab, for example, unless you opt-out, Schwab may share your information with its affiliates primarily for marketing purposes. We recommend you opt out of this information sharing by calling 1-877-812-1817 within the U.S. or +1-415-667-8400 outside the U.S. You should also contact all your other financial services companies (banks, brokerage firms, credit card companies, etc.) and ask how you can opt out of information sharing.

What should you do if you think you're the victim of fraud?

If you ever suspect fraud or identity theft, the faster you act, the better. The best mindset to have in these moments is you're now in a race with the fraudster, attempting to prevent him or her from taking control of your identity and financial assets.

Call us first. We'll work with you to determine a plan of attack. The steps we recommend will likely include any or all the following:

Call the Schwab Identity Theft Team at 1-877-862-6352. If you're abroad, call +1-602-355-7300. Schwab will evaluate the circumstances and may suggest one or all the following:

  • Verbal password on your accounts.

  • Use of a security token for online access.

  • The cloning of your accounts to new account numbers.

If Schwab (or any of your other financial institutions) determines unauthorized activity, consider freezing your credit reports and/or putting security alerts in place with all three credit monitoring agencies. (You can freeze your credit at any time, not just when fraudulent activity has occurred.)

Check your computer for malware by performing a full anti-virus and anti-spyware scan if you suspect a possible compromise.

Change account passwords after you’ve ensured your computer is not infected with a virus, malware, or spyware. Make each password unique and strong and use two-step verification when available.

File identity theft forms with the IRS. If a fraudster has your Social Security Number and the right combination of private personal information, they could file a fraudulent tax return on your behalf, have the refund sent to their bank account, and disappear. When the IRS realizes what happened, you may be liable to repay the tax refund. The following forms can help:

  • Form 15227 - Filing this form with the IRS will provide you with a confidential six-digit PIN known only to the IRS and prevents a fraudster from filing a tax return under your Social Security Number. You must present this PIN every time you file a return. The PIN is valid for one calendar year; the taxpayer must obtain a new PIN each year.

  • Form 14039 - If you're the victim of tax-related identity theft (e.g., someone files a fraudulent return on your behalf and collects the refund), you should consider completing this form.

Notify your bank(s), credit card companies, and the appropriate government agency.

Visit the FTC's Identity Theft Site to learn more.

Forward suspicious emails to nophishing@cbbb.bbb.org.

For more information, review the following resources provided by Schwab, which we've found to be extremely helpful and comprehensive:

We will continue to stay vigilant against fraud on our end and want you to do the same.

As always, please contact us if we can be of further assistance.

Pat Cornelius
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