FINRA’s Best Practice Tips for Keeping Your Personal Financial Information Safe

By Janelly Crespo

In today’s age and with the help of modern technology, identity thieves can easily obtain an individual’s personal information. Whether thieves use keystroke-logging software to capture usernames and passwords or send phony emails requesting personal financial information that a brokerage firm would never request through an email, there are numerous ways for an identity thief to steal personal information.

FINRA recently released a best practice tips guide informing investors how to ensure that their personal financial information is secure within their investment accounts. Although brokerage firms have an obligation to safeguard an investor’s personal financial information, there are some steps that an investor can follow to further protect their information from identity thieves.

To avoid falling victim to identity thieves, FINRA proposes that investors take the following steps to secure their brokerage account and personal financial information:

  1. Use strong passwords and PINS that contain both numbers and letters. Do not share your password with others or store them on your computer;
  2. Maintain up-to-date security software, such as personal firewalls, especially if the computer is used for online financial transactions and use encryption software on your laptop;
  3. Avoid using public computers and access your brokerage account from your own computer;
  4. Always log out of your brokerage account to terminate your access to your brokerage firm’s website;
  5. Avoid using unsecured Wi-Fi connections as they do not provide as much security as wired Internet connections or encrypted wireless networks;
  6. If using applications from a cellular device, make sure that your phone is password-protected and you are using the highest security setting that the application offers;
  7. Make sure that the brokerage firm’s website indicates that the site is secure as you access your brokerage account online. Checking that the website’s URL address starts with “https,” contains a key or closed padlock in the status bar, or the address bar turns green are signs that the brokerage firm’s website is secure and encrypted;
  8. Download software only from websites you know;
  9. Do not respond to emails requesting personal financial information;
  10. Read your monthly account statements and ensure that all contact information is correct and that all security transactions are authorized and made by you;
  11. Secure all your confidential financial documents;
  12. Safeguard your Social Security Number; and
  13. Do periodic identity theft check.

If a customer believes that their personal information has been compromised, they should immediately contact their brokerage firm and other financial institutions—such as credit card issuers—to notify them of the problem.

For more information on how to safeguard your personal financial information or for more information on this topic, please visit FINRA’s website.

FINRA’s Helpline for Seniors Leads to FINRA Investor Alert, Warning Against Ads for “High-Yield CDs”

By Brendan Studley

Last summer, our blog featured a post on FINRA’s new Helpline for Seniors. As some unsavory brokers continue to develop new ways to victimize investors, the helpline aims to protect the public by providing a welcoming and open resource for callers get to the bottom of any questions or concerns. In February 2016, the FINRA helpline is already reporting success as many callers have phoned in to get advice on their investments.

Specifically, the helpline has fielded a number of calls that alerted FINRA to a new strategy that investors should be wary of. This new strategy—which involves advertisements promoting “High CD Yields!”—prompted a FINRA Investor Alert in February 2016 to warn investors of this “too good to be true” deal.

FINRA explains that the while some promotions of this type could be legitimate, others are merely bait to get customers “in the door” where a savvy salesperson attempts to persuade investors to purchase a different product, like an annuity, in addition to the special “high yield CD.” Sometimes, the salesperson indicates that these products also include further incentives like “bonus” cash to make the deal look even sweeter. Further techniques include telling investors that the products are an exclusive and special offer in limited supply, and that they are risk-free avenues to increased wealth. Salespersons sometimes include other incentives in the deal, like free meals or other special offers, to make potential clients feel as though they are now obligated to return the salesperson’s favors.

Unfortunately, as discovered from Helpline callers, these products have ended up being a new way for salespersons to earn unnecessarily high commissions at the expense of their client, who could now be stuck with a risky, unneeded product that may not be FDIC-insured, rather than a bank CD. In fact, FINRA reports that investors should consider checking with their state’s insurance commission because some products being pushed on customers are actually various types of insurance. On top of paying high commissions, the products could include further fees down the road, and investors “generally must commit a sizable minimum purchase amount, such as $25,000.”

To avoid falling victim to any such ploys, investors are encouraged to continue to reach out to the Helpline, and seek other advice from additional FINRA resources like BrokerCheck.