Archive for the ‘Retirement’ Category

When Your 401K Gets Hacked

Monday, March 11th, 2013

When Bill Foster’s 401K account was emptied and he lost over $40,000 he did what a lot of us might do: he sued the company managing his funds.  But the verdict was rendered a few months ago: the company is not responsible.  It’s his fault since he failed to file a change of address, and someone else used the information she received (by snail mail, at his old address) for accessing his account.

In another case in 2007 a man lost $179,000.  He was hacked by a cybercriminal, but it was also concluded there was no liability on the part of the fund company.  Fortunately for him, investigators were able to recover the funds before they were wired out of the country.  Unfortunately for the rest of us, cybercriminals are much smarter today than they were in 2007.

In the first instance, Bill had moved out of his home a few months before the 401K fund managers sent a letter to his home with details on how to access his accounts.  His estranged (soon to be ex) wife opened the letter and used his Social Security number to reset his password and receive a new pin.  Bill only discovered she had drained his account the following year.  Although clearly his ex-wife’s actions were fraudulent, Bill is considered liable (more…)