Money Mondays: Protecting Your Financial Information

Today Mellody is talking about financial information, and how to protect it.

Mellody: With numerous headlines over the past few years about data breaches at major companies such as Target, or even at the U.S. government, it is understandable that most Americans are concerned their financial information being compromised or exposed. And it is great that people are worried, because if the bad guys get ahold of your information, you could be in for a world of hurt! Today, I want to talk about what you should be worried about, and how to protect your important personal information.

Is this something most Americans are paying attention to?

Mellody: Thankfully, it is. A recent survey found that 77 percent of those polled are very concerned about their financial information falling into the wrong hands. This worry ranked higher than concerns about being a victim of other activities, as only 62 percent of respondents said they worry about having their email hacked, and only 59 percent say they worry about their home being broken into! In fact, if forced to make a decision, 55 percent of those polled say they would rather have naked photos of themselves leaked online than have their financial information stolen! Americans are definitely paying attention. However, their concerns are not motivating people to act.

Really? Explain that for us.

Mellody: The same survey found that nearly half of respondents admitted to lax information security practices. Forty-six percent of those surveyed say they rarely or never change the passwords for their financial accounts, and 44 percent say they use the same password for multiple accounts. In addition, 39 percent say they use public networks to access their financial information! Any one of these can make it easier for the bad guys to gain access to your information.

 If someone does get ahold of your financial information, what could happen?

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Mellody: Any number of things could happen, Tom, and none of them are good. If identity thieves get ahold of your financial information, they can open a new credit card account in your name, or they can change the billing address on your current cards and run up charges on that account. They can open a bank account in your name and write bad checks, or even gain access to your current accounts and steal your money. They can even take out loans or insurance policies in your name! Needless to say, any combination of these actions can wreak havoc on your financial situation.

So what do we need to do to secure our financial info?

Mellody: There are a few common sense, straightforward rules to follow. First things first: you have to be on top of your passwords. Do not use the same password for all of your accounts. If you do this and a hacker gains this information, they have access to everything. It is also important to select unique passwords – do not use “password” as your password – and to change your passwords regularly.

Second: do not use public or unsecured wireless networks to access your bank account, your stock portfolio, your student loan accounts, or other intimate financial sites. Third, keep sensitive personal files and account information on your personal computer, not on work or other public computers. While none of this is rocket science, it does require some behavioral changes. Given the stakes, they are small, and taking preventative measures is much easier than trying to rebuild your whole financial life after your information has been compromised!

We can be certain of that! Thanks for joining us this morning, Mellody!

Mellody: Happy to help, Tom!

Mellody is President of Ariel Investments, a Chicago-based money management firm that serves individual investors and retirement plans through its no-load mutual funds and separate accounts. Additionally, she is a regular financial contributor and analyst for CBS news and CBS.com.

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