Tags: cyberfraud | lawsuit | danger | iras | 401ks

Cyberfraud Lawsuit Reveals Dangerous Threat to IRAs, 401(k)s

Cyberfraud Lawsuit Reveals Dangerous Threat to IRAs, 401(k)s

Wscott Mcgill | Dreamstime.com

Peter Reagan By Thursday, 11 June 2020 08:58 AM EDT Current | Bio | Archive

One look on the FBI website reveals many different ways that a criminal could try to access assets in most 401(k) plans, IRAs and pensions.

Data breaches, compromised email accounts, ransomware, and phishing are a few of the many ways you could have part or all of your retirement disappear in the blink of an eye.

According to the FBI, "Internet crime schemes steal millions of dollars each year from victims and continue to plague the Internet through various methods."

Obviously, not all of those "millions of dollars" come from retirement accounts. But according to a MarketWatch article from earlier this year, they are quickly becoming a "hot" target:

Bank accounts are a top target for hackers, and retirement accounts may not be far behind. Cybercriminals are moving toward retirement and loan accounts.

A recent "breach of contract" filed lawsuit against MandMarblestone Group (MMG) and Nationwide revealed some startling security problems.

According to a report on the lawsuit, unknown criminals were able to empty $400,000 from the retirement account of Jess Leventhal using what could be a form of "man in the middle" attack:

The criminals "posed electronically" as Leventhal's office administrator and sent fraudulent withdrawal forms to MMG, which appeared to originate from Leventhal's office email account. These fraudulent withdrawal forms requested that funds be sent to a bank account that did not belong to Leventhal and had not been previously used by him.

The case remains to be finalized as further arguments are still being made. But one thing is certain, digital assets that are in so many IRAs, 401(k)s and pensions can be easily wiped out once full access is granted to a cyberattacker.

And according to another article published in the Milwaukee Sentinel Journal (MSJ) earlier this year, it might be tough to get your money back:

Unlike with stolen credit cards, a saver's losses to fraud in retirement investment accounts aren't limited by federal law, although mutual fund companies typically say they'll reimburse funds lost to fraudulent activity.

Not something you would want to hear if your retirement account balance was suddenly reduced by any amount without your knowledge.

And even if your plan administrator offers some form of guarantee that eventually makes you whole, investigations take time.

Which begs the obvious question...

What Can You Do to Protect Your Account Now?

The same MSJ article provided some basic advice that everyone should follow to secure their retirement accounts:

  • Make sure any computer or device used to access accounts is protected by a firewall and has current antivirus and antispyware software.
  • Be wary of responding to, opening attachments in or clicking on links in emails that ask for your financial information.
  • Open and read any letters or paper statements from your mutual fund or money manager to see if everything looks accurate.

You can follow-up this advice by also making sure you check on your accounts often, using strong passwords, and watching what type of information you put on social media.

All good advice to follow, but one nagging problem remains, your assets are still digital 1's and 0's on a computer screen.

Add Security to Your Retirement Portfolio by Considering This

You can't hold the assets in your retirement plan, but if any of those that are in digital form are hacked, a thief can certainly transfer them fast.

That's not the case with precious metals like gold and silver. Unlike digital assets or ETFs, they cannot be hacked – you can even choose where to store your holdings.

So as part of your retirement security plan, consider tangible assets like precious metals to help bring you peace of mind.

Peter Reagan is a financial market strategist at Birch Gold Group. As the Precious Metal IRA Specialists, Birch Gold helps Americans protect their retirement savings with physical gold and silver. Discover more by clicking here now.

© 2024 Newsmax Finance. All rights reserved.

One look on the FBI website reveals many different ways that a criminal could try to access assets in most 401(k) plans, IRAs and pensions.
cyberfraud, lawsuit, danger, iras, 401ks
Thursday, 11 June 2020 08:58 AM
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