Preventing online fraud starts at home

Ellen Rinaldi

Most of us don't think twice before shopping, paying bills, or checking retirement accounts online. It is a good idea, though, to take a moment to consider whether we're doing our part to help keep those online transactions secure.

Many much-used sites, including, come equipped with sophisticated security systems that help protect user information from online predators, but if we don't take some simple precautions, we may be putting ourselves at risk for potential fraud.

"We work hard to protect our shareholders against criminal activity," said Ellen Rinaldi, a principal in Vanguard's Security and Contingency Services. "But it's just as important for them to practice good security at home."

Don't ignore the basics

Although it may seem simplistic, protecting your online accounts with appropriate passwords and making sure your computer is equipped with up-to-date antivirus software are the first steps in deterring online fraud.

"Securing your information online is equivalent to having an alarm system on your house," said Ms. Rinaldi. "It will help deter potential predators, so they'll pass by your account and move on."

When it comes to passwords, use a mix of letters and numbers to create a sequence that can't be easily figured out.

"If you're struggling to come up with a password, try using a favorite song line," said Ms. Rinaldi. "Take the first letter of each word, and add a number that you'll easily associate with the song. For example, if you used 'My country 'tis of thee' and the number 1776 for the year our country was founded, your password would be MCTOT1776."

Strangers are only part of the problem

Sadly, it isn't always online predators who steal personal information or access accounts without permission. In reality, far more fraudulent acts are committed by people we know than by strangers.

"Unfortunately, we've had many instances of family members, friends, or caretakers who were trusted with account passwords and used them for no good," Ms. Rinaldi said.

Even though you may trust your family and friends implicitly, you never know who else may come into your home. Follow these tips to help protect yourself:

  • Memorize your passwords. If you have to write them down, keep them in a safe place.
  • Keep a close eye on your accounts, so you'll notice signs of fraudulent activity as early as possible.
  • Make it a habit to open mail and e-mail from your financial institutions as soon as it arrives and file it in a safe place.
  • Pay particular attention to confirmation statements. If you receive confirmation for a transaction you didn't make, someone else may have gotten access to your account.
  • Contact your financial institution right away if you suspect fraud.

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