7 On Your Side: Securing Your Savings - KLTV.com-Tyler, Longview, Jacksonville, Texas | ETX News

1/9/06

7 On Your Side: Securing Your Savings

  Businessman George Rodriguez is a savvy investor who loves to wheel and deal online. Usually his trading is trouble free. But one day he says, "I started receiving a series of emails in confirmation that I was selling all my stocks, but I hadn't accessed the account in six months." And tens of thousands of dollars were set to be funneled into someone else's bank account!
  "Right away, the alarms went off," says George. He was told by his brokerage company that he'd been 'had' by a hacker. It's a story the Security and Exchange Commission says is becoming all too common.
  "Six months ago, we really hadn't heard much about this kind of problem, but now we are seeing reports of these cases and it concerns us greatly," says Susan Wyderko with the Security and Exchange Commission. But it's not just e-investors getting hit. Experts say millions of bank accounts have been hijacked too. That, all too often, phishing and spyware scams allow hackers access to usernames and passwords. "We need to increase the controls there," says Michael Jackson with the Federal Financial Institute Examination Council.
  While no guidelines are in the works on the brokerage end right now the U.S. government is calling on banks to add more safeguards. A council made up of the biggest federal financial organizations is recommending new log-on procedures for online banking by the end of this year.    
  "What we call single-factor authentication is a basic password and ID. Now, we're asking banks to use another form of identification," says Jackson. It's called multi-factor authentication. When you log on, in addition to your user name and password you may have to verify a preselected picture, enter a random number or answer a question.
  "That can be a challenge word, maybe asking you your birthday, your favorite cake, your favorite dessert," says Jackson. And even if the extra layer of protection is there the National Consumers League worries that hackers will eventually find their way around it. "If somebody tricks you into providing that information, then, of course, it defeats the whole purpose," says Susan Grant with the National Consumer League.
  The council says there is no magic bullet, but this is a step in the right direction. The banking industry agrees and says most banks will comply, even though the guidelines aren't mandatory. "The more layers of security you have, the better off you are," says Wyderko. George says the brokerage company he uses doesn't offer the new security features yet, but he's doing all he can now to keep his finances safe. 
  Thanks to those emails that tipped him off something wasn't right, George says he got everything straightened out before any money left his account.

Christine Nelson reporting. cnelson@kltv.com

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