Keeping Yourself Secure in the Digital Age

Imagine back to before the internet. Before the first computer, even. Our investments – stock certificates, paper bonds, wads of cash, rolled coins, gold – all had a singular physical form. They each had to be somewhere at all times. Keeping your assets safe depended on the security of locked door that sealed them from the outside world. The vault at the bank, a safety deposit box, the safe in your basement, they all felt impenetrable; they made us feel secure. Then came debit and credit cards. These tools are designed to give flexible access to your accounts. In short, your assets can be anywhere.

The world changed, so necessarily, we changed. 

We changed our focus – don’t give out your PIN, don’t let someone walk away with your credit card, don’t check your bank account on a public computer. But we also changed our comfort level. I for one, am entirely confident that if my credit card is compromised, Visa will make things right. And I’m not relying on blind faith. They’ve done it a few times in our relationship. “Compromised credit card” is banker-speak for “someone bought stuff and made me pay for it”. I realize that this is the equivalent of saying that I am totally fine being stolen from. I’ll admit that I feel a bit uneasy about how easy it is to fix.

The world has changed again and so must we.

Online banking has made access to financial accounts more ubiquitous yet. Online shopping involves transmitting your credit card information. Adding to the exposure, E-retailers are all too eager to offer to store your credit card information on their servers for “faster checkout”. It might be a tiny bit easier for you, but it also leaves an extra copy of your information out in the world. Online tax filing can involve entering the mother of all personal datapoints: your SIN.

Each of these interactions puts your personal data out into the world. Criminals have started to focus on intercepting it. With enough of your information, they can pretend be you (or at least near as makes no difference). They could convince a bank they are you and take the money from your account. More commonly, they use personal information to open new bank accounts and credit cards, take out new loans in your name, or file fictitious tax returns. Your personal data is the master key to your finances.

Just like before, we should change our focus and comfort level. Start by acknowledging that the lock and key model of financial security doesn’t work if you don’t control the room that your data is stored in. In the new world, the defense needs to be three-fold:

1.     Still keep your doors locked tight. On the physical side, keep valuables in a safe or safety deposit box. On the electronic side, use long, complex passwords for your online financial accounts and don’t use the same password more than once.

2.     We all learned to protect our PINs, now we need to take it a step further: protect your personal information. Avoid checking that box that says “Save my card for future use”. Think twice before entering the combination of name, address, and date of birth on a website. Think three or four times about entering your SIN.

3.     Most importantly, set up a good alarm system so that you know if your personal data is being used. The most effective alarm system, and one that we recommend for everyone, is to subscribe to a credit monitoring service. Whenever someone applies for credit in your name, the financial institution will request a credit report from one or both credit reporting companies that operate in Canada. Credit monitoring services will alert you whenever a credit report is requested. This means that even if someone gets the master key, you can know if a fraudulent application is being made in real-time, so you can take steps to stop it. Both credit reporting companies offer monitoring services, so do most major financial institutions. It doesn’t matter much who you choose, just make sure the company is reputable.

Finally, remember that a trusted wealth advisor can be an excellent ally and a gatekeeper to your investment portfolio.  The human relationship you have with them is a strong lock. If they know your voice, how you communicate, and your cash needs, they can help protect against cyber intruders. If you suspect that your financial information has been compromised and you want help navigating a solution, call them. If you receive a message that you think might be a scam, ask their opinion. If you are ever unsure about anything related to your financial, ask questions until you are satisfied.