COVID-19 is stressful enough, with market volatility impacting retirement nest eggs, and economic uncertainty contributing to short-term financial challenges for many families. Unfortunately, that’s not the only risk people need to be prepared to navigate during these unprecedented times.
Fraudsters will take advantage of opportunities created by the pandemic to look for points of weakness anywhere they can find them. In fact, it’s estimated that Americans have already lost more than $77 million to fraud this year.[1]
We know fraudsters are looking to exploit elements of the CARES Act that provide retirement plan sponsors the ability to allow in-service distributions, loans and withdrawals free of fees. The combination of the work-from-home model most workers are experiencing, coupled with the anxiety and emotional distress retirement plan participants could be feeling given market volatility and job losses related to the pandemic, provides a ripe target.
Preventative measures
The good news is there are actions retirement plan sponsors and participants can take to help prevent fraud when it comes to their retirement account. Here are several tips plan sponsors can share with participants to promote fraud prevention:
Create online profiles for all of your financial accounts to help prevent fraudsters from accessing those accounts.
Wendy Shaw
Use strong passwords that are 12 or more characters long and include a variety of capital and lower-case letters, numbers and special symbols. Always create unique passwords for every site that you visit. If a fraudster breaches one, it leaves all of your other accounts vulnerable. Using a password manager that offers a password randomizer can help provide secure, unique passwords for all of your accounts without the burden of remembering them all.
Make sure to log into your online account frequently to monitor account activity and review statements. If you see anything out of the ordinary, contact the company immediately.
Keep contact information up to date on all financial accounts including address, phone number and email address.
Update your passwords regularly even if the website doesn’t require it.
Make sure all computer software and mobile applications are kept up-to-date as providers often send security patches in their software updates in order to close known security gaps.
If the website offers to send text messages each time there is log-in activity, be sure to take advantage of that option so you’ll be alerted if someone is trying to access your account.
Only connect to the Internet through private connections. Make sure your home wi-fi is secured via password so that others cannot use your connection.
If offered the choice of security questions to prove your identify, don’t use security questions that are easily found online. Questions such as “Mothers Maiden Name” are easily found through open-source web searches and questions such as “Pet’s Name” can be found via social media searches. Make sure your security questions have answers that only you yourself would know.
E-mail Phishing is on the rise, especially in the wake of COVID-19. Make sure you never click any links or open any attachments from an e-mail sender you do not know.
If you learn that one of your accounts has been compromised, immediately alert your retirement plan provider and any other financial institutions where you hold accounts so that they can take extra steps to protect your account.
Call your cell phone provider and make sure you have a secure pin set up on your account.
Make sure to use some form of virus detection software on your PC and mobile devices. This will help ensure any malicious malware is detected, which can run in the background of your electronic device and collect information on your activity.
Now more than ever, retirement plan participants are looking to their employers and plan providers for guidance and support when it comes to securing their retirement savings. By sharing these tips with plan participants, plan sponsors can help them foil fraudsters and protect their hard-earned savings.
