How to Protect Yourself From Identity Theft in Stock Trading?

Stock trading involves transactions of millions of dollars every day. Even a slight lapse in online security of personal information and financial transactions may cost the stock traders heavily.

When your personal information such as your user ID and password is taken away without your knowledge and used to defraud you, it is called identity theft.

You must make yourself aware of the various identity theft tactics that are used by the identity thieves or hackers on the Internet. You must remain vigilant about such possibilities and protect your account by taking suitable measures. Some of the schemes used for stealing your identity are:

Phishing

Phishing is the process of sending apparently legitimate emails, pop-up messages or building phony websites to hoodwink the users into parting with their personal account access information. Phishers send these messages to collect data that includes name, account user IDs, passwords, address, date of birth, social security number and so on.

Then these thieves open false accounts in your name or access your existing accounts. Imagine being defrauded of your earnings from your online stock trading account soon after you have received money after selling a stock!

The stock ploy used in the email message is to create a sense of urgency under the threat of account closure if the personal information sought in the message is not made available to the sender.

The reason offered is that your account information needs to be verified or that your account has suffered a security breach. The email appears almost identical to the ones you usually receive from your stock broker, banker and so on. They carry the same logo, name and feel as the original mails.

How to protect yourself from phishing?

1. Use security software with anti-phishing features, which are offered by many companies. These software programs help you to identity the junk mails and filter them from the incoming mails.

2. Never reveal your personal information especially passwords and social security numbers through emails or pop-ups. This vital information should only be revealed through the legitimate formats in the websites of your stock brokerages.

3. Beware of call to action emails asking you to urgently provide your personal information under threats of account termination and so on.

4. Be careful when you type the website address of your stock broker. If you mis-spell the URL, you may possibly be taken to the fake website set up to phish your information.

5. Use spam detectors which most of your email account services provide free of cost.

6. Regularly update your Windows operating system and other security software to ensure the blockage of phishing threats.

7. Use the latest version of your internet browser which contains the current security features.

8. Never seek your account information through the emails or pop-ups.

If you ever suspect the genuineness of an email or message, contact your stock broker via a secure channel or call them on telephone.

Pharming

The advanced version of phishing is called pharming. Members are directed to a malicious website that is almost similar to your stock broker’s website in appearance and feel. Once there, you are asked to upgrade or update your account information or change your passwords.

How to protect yourself from pharming?

When you visit a website for a purchase or a financial transaction, ensure that the website contains the SSL protection. SSL or the Secure Socket Layer is a communication protocol which is used to protect your vital data transfers over the Internet.

Most stock brokerages use the industry leading 128-bit VeriSign SSL encryption technology on their sites to ensure that your personal data protected from eavesdropping, tampering, and forgery.

An authentic website contains a clickable VeriSign Certificate Icon located at the bottom of each page.

Trojan Horses

A Trojan horse is a software program that installs malicious code on your computer. Trojan horses usually remain inactive till you take an action such as clicking on a link or an email. As you hit the link, the code is activated and the hacker can capture your keystrokes and collect your user ID, password and other sensitive data. Trojan horses often come with free downloads such as screen savers or spyware.

How to protect yourself from Trojan horses?

o Use security software from reputed companies that block the Trojans and key loggers.

o Regularly update your security system, which is the best form of defense again the Trojans and spyware installers.

o Use the latest version of your Internet browser as it contains the latest security features.

o Be cautious while sharing peer-to-peer files. Trojans are often found in such file sharing programs waiting to be downloaded.

Preventing Identity Theft

The best protection against identity theft, without doubt, is identity theft prevention. A recent article in USA Today shows how identity theft can happen. An identity theft ring hacked into Marshall Department Store’s main computer and stole thousands of credit card numbers. The ring members then traveled throughout Florida using these stolen credit card numbers to charge high-value merchandise at stores like WalMart.

They then sold the merchandise to “fences,” or even more brazenly, returned the merchandise to WalMart stores for a cash refund. A WalMart clerk got suspicious and called store security, which contacted police. The ring members are now all serving long sentences in the slammer.

But the more important point is, if you’ve ever shopped at Marshall’s you could have found yourself with credit card bills for many thousands of dollars of merchandise you never purchased. What a gigantic headache! True, you wouldn’t be legally responsible for those fraudulent purchases. Nevertheless, your credit record would be quite a mess for a long time.

Clearly – notwithstanding some recent legislation – identity theft is the crime that’s probably most likely to happen to you. It’s simply too easy for crooks to get hold of credit card numbers and social security numbers these days. In this report I’ll briefly discuss how identity theft happens, what to do if it happens to you, and also mention a few important self-protection measures.

Identity Theft Defined

Identity theft doesn’t usually mean somebody steals your identity and then goes off to a faraway place and lives his/her life impersonating you and running up bills in your name. It could mean that, but that is extremely rare. Most commonly, it just means somebody runs up bills using your credit card or credit rating. Sometimes a lot of bills. There have even been cases of identity thieves taking out house mortgages under somebody else’s name, and then flipping (re-selling) the house.

Two Types of Identity Thieves

There are two main types of identity thieves, namely identity theft rings and individual identity thieves.

Identity theft rings resemble little Mafias with a boss and a group of underlings who do the more risky tasks, such as setting up credit accounts and going into retail stores to purchase merchandise using fake credit cards. (Many rings actually manufacture valid-appearing credit cards, or hire specialists to do it for them.)

Typically identity theft rings use hit-and-run tactics, working in a fixed location for a few months then disappearing.

The other type of identity thief is the lone individual who is trying to upgrade his/her standard of living by credit card fraud. Usually, this type of identity thief will not make quite as much of a train-wreck of your credit standing as the identity theft ring. Even so you may find yourself spending many hours trying to fix it.

Needless to say, both types of identity thieves – the rings and the individuals – usually target high-income individuals. Anyone with an expensive car, home, or high-paying job is a more-likely target. Unfortunately, your social security number can be just about as easy to get these days as your phone number. All a crook needs is an account with an information broker online and your name and address. Then, given your social security number and a little additional information like your date of birth (which is also pretty easy to find online), the identity thief can set up all kinds of charge accounts in your name, arranging to have the bills sent to a phony address so that it will take longer for you to catch on to what’s happening.

But not all identity theft stems from online information brokers giving out social security numbers. In fact experts say only a very small fraction of it does. Most often, thieves directly steal credit card numbers, like the ring that I mentioned above which operated in Florida. On a smaller scale, a thief working as a waiter or clerk may steal your credit card number or possibly your whole purse or wallet.

In any case, it can escalate from a major nuisance to a major crisis if the identity thief commits a crime while impersonating you, possibly by means of a fake driver’s license or other forged document. Should he/she be charged and then fail to appear in court, you could find yourself under arrest and charged with the crime or other offense.

If It Happens To You

If you receive bills for merchandise/services you didn’t buy, or get a call from a merchant complaining about a bill you didn’t pay for something you didn’t order, you’re very probably facing identity theft. Here’s the process you should follow. Note: You might also wish to read the FTC’s webpage (ftc.gov/bcp/edu/microsites/idtheft) on this topic.

First, get as much information as you can from the merchant, such as when the purchase took place, type of credit used (credit line or credit card), account number, monetary amount, where the bills were sent, and if a credit application was filled out (if so, get a copy of it). Explain to the merchant that you’ve been a victim of identity theft – always use that term, “identity theft” – and request that he not report the bill to the credit bureau in your name.

Second, contact one of the three major credit bureaus and tell them to put a fraud alert on your credit reports. This prevents the identity thief from opening more accounts in your name. You only need to contact one of the three credit bureaus to place the alert, since whichever one you notify will then alert the other two as well. The credit bureaus are:

Trans Union: 1-800-680-7289
Equifax: 1-800-525-6285
Experian: 1-888-387-3742

Have the credit bureau representative send you a copy of your credit report (this should be free). Then study it carefully and look for fraudulent charges. Close all accounts you think have been tampered with and write a letter to those merchants explaining that you have been a victim of identity theft. (Note: don’t mail the letters yet. You should enclose a copy of your police report; see below.)

Third, take your credit report to your local police department and file a formal police report. Always keep this report with you in the event you ever find yourself charged with a crime committed by the identity thief. Incidentally, your local police department tells you they don’t accept reports for identity theft tell them you wish to file a “Miscellaneous Incidents” report. As an alternative you can file your report with the State Police.

Fourth, visit your local Department of Motor Vehicles (DMV) and inform them that you have been a victim of identity theft. Request a new drivers license with a new drivers license number.

Fifth, try to find out if there are any currently pending criminal or civil actions against you. I suggest using online service US Search.com as a quick, reliable source for this type of information. If you do find court judgments against you should then write a letter to the court explaining that you have been a victim of an identity thief (enclosing a copy of your police report) and ask that the judgment be vacated.

Sixth, contact the U.S. Department of State (again, including a copy of your police report) and ask that they confirm that a passport has not been recently issued in your name. If one has, ask that it be canceled immediately. The address to write to is:

U.S. State Department Attn: Passport Services
1111 19th St., NW, Suite. 500
Washington DC 20522

Preventing Identity Theft

A hundred percent identity theft prevention doesn’t exist. There’s no surefire way to completely protect yourself against identity theft – but there are some things you can do to make it less likely you’ll be targeted.

1. Take steps to make your social security number a little harder for identity thieves to obtain. As said, identity thieves can easily obtain your SSN if they know your name and address. So why not make it harder for them to get your address in the first place? You can do this by using a post office box number on all credit applications and other types of forms which will become public information, such as registration records.

2. Try to keep your telephone number out of general circulation. Why? Because once somebody knows your telephone number, they can use a “reverse directory” on the Internet to easily obtain your home address.

3. Always use personal checks only for by-mail bill paying, never for day-to-day, in-person purchases. Your personal checks contain identifying information about your bank account plus your personal signature. So it’s much safer to use a credit card or debit card.

4. Get your name removed from “pre-screening” programs (marketing services offered by the three credit bureaus). Whenever you get a credit card offer in the mail, it’s because your name and address appeared on a pre-screening list, which contains only credit-worthy individuals. But these lists are commonly used by identity theft rings to target potential victims. To get removed from such lists of all major credit bureaus, call 888-567-8688 and inform the clerk that you wish to be removed from all pre-screening programs.

Working With A Business Broker: What You Need To Know

You’ve worked too hard and too long to risk selling your business by yourself. You need a professional who knows how to sell businesses, where to advertise, and has industry contacts. The chances are you’ve not sold many businesses in your career, and now is not the time to learn.

Engaging Your Broker’s Services

When seeking a broker to sell your business, your due diligence is required in selecting the most suitable firm. Some things to think about:

– You want to know how your broker will advertise your business and their budget for this purpose. – If your sale is confidential, you’ll want to know how the broker will advertise, yet keep your identity unknown. – Does your broker think a cash sale is best for you, or a price with terms? – Determine that the broker is a good fit for your type of business; has the firm previously sold a business of your type and size, and in your location? – Remember that time kills deals… so is the broker experienced in moving the process along rapidly? – Be clear about the frequency of contact you expect from your broker; if you want frequent updates, say so. – Find out how quickly the broker responds to buyer inquiries, and the protocol for moving prospects forward. – Inquire about how many listings the broker has and determine if he or she is too busy to be a good selection for you.

Reviewing the engagement proposal

Once you have selected the broker you believe will do the best work for you, the broker will require you to sign an engagement letter detailing your working relationship. This letter states the terms of the services and the fees you will pay. Most engagement letters have standard language; some of the elements you should expect are:

– The services you are hiring, such as preparing a marketing brochure, working with specialists on your behalf, advertising your business’s availability, filtering inquiries, and recommending worthy prospects. – Limitations of the services the broker will provide. – A term for performance; 3 – 24 months is typical. – Client’s responsibilities in support of the effort. – A disclaimer describing the broker’s potential for performance. – A description of the fees, discussed below.

The broker’s fee

Brokers are compensated either hourly, through a success fee, by a retainer, or by combinations of these options. Here are some details:

Success Fee: A success fee is a commission based on a percentage of the sale price, or a dollar amount. Typically, a success fee is between 5 – 12% and the smaller the sale, the higher the percentage.

Advisor’s Fee, or Retainer: Brokers expect to be paid for their hard costs and minimal services whether you sell or not. If the sale is successful, their fees may be deducted from the success fee. The retainer may include the advertising budget and other upfront costs the broker will commit to doing, such as meeting with members of your professional team.

Reverse Fee: As mentioned above, most of the time a broker will present a graded fee schedule with a higher fee percentage for a smaller sale price. A reverse fee schedule works like this:

Assume that you and your financial planner have determined your business has a value of $700,000 and you have set this as your top price. The broker tells you they charge 10% on all sales under $1 million. However, the broker also tells you his firm will try to sell your business for over a million, and if they do, will you be willing to pay 15%? Do the math and you’ll see that a reverse fee is desirable.

Consult your business broker or attorney with questions about the terms of your agreement.