Dig­i­tally, who has your back? Not a soul

Houston Chronicle - - BUSINESS - CHRIS TOM­LIN­SON

No one is look­ing out for your fi­nan­cial health.

Not your bank, not your fi­nan­cial ad­viser, not your credit agency, nor your fa­vorite mer­chant.

Turns out the dig­i­tal age isn’t all that dif­fer­ent from the ana­log age. Trust no one.

Credit mon­i­tor­ing com­pany Equifax al­lowed hack­ers to ob­tain the So­cial Se­cu­rity num­bers, birth dates and other sen­si­tive in­for­ma­tion of about 143 mil­lion Amer­i­cans, or 47 per­cent of the U.S. pop­u­la­tion.

A com­pany whose busi­ness is pro­tect­ing the in­tegrity of the con­sumer credit in­dus­try failed to prop­erly se­cure data that can now be used to de­stroy the in­tegrity of the con­sumer credit in­dus­try. The in­for­ma­tion re­vealed by the hack­ers is suf­fi­cient for crim­i­nals to steal the iden­ti­ties of 143 mil­lion Amer­i­cans.

Equifax was sup­posed to be a Fort Knox for data, but in­stead it didn’t de­tect the hack­ers for nearly two months, and then ex­ec­u­tives took an­other month

to re­veal the breach. That gave crim­i­nals a five­week head start to steal our good credit scores.

The de­lay also al­lowed John Gam­ble, Equifax’s chief fi­nan­cial of­fi­cer; Rodolfo Ploder, Equifax’s president of work­force so­lu­tions; and Joseph Loughran, Equifax’s president of U.S. in­for­ma­tion so­lu­tions, a chance to sell a com­bined $1.8 mil­lion worth of stock be­fore the price plum­meted.

Clearly the ex­ec­u­tives at Equifax did not take cy­ber­se­cu­rity nor the best in­ter­ests of con­sumers to heart.

This is get­ting to be an old story. Wells Fargo re­cently re­vealed that the fraud per­pe­trated by their em­ploy­ees was 50 per­cent larger than pre­vi­ously re­ported, reach­ing at least 3.5 mil­lion fake ac­counts.

A new class ac­tion also al­leges that Wells Fargo bilked cus­tomers out of mil­lions of dol­lars by charg­ing ex­tra un­war­ranted fees on mort­gages. Your friendly neigh­bor­hood banker, it seems, can’t be trusted, ei­ther.

For­mer President Barack Obama tried to in­tro­duce a rule that would legally re­quire peo­ple ad­vis­ing you on your fi­nances to look out for your best in­ter­est, but the Trump ad­min­is­tra­tion has sus­pended that rule and is pre­par­ing to kill it.

The so-called fidu­ciary rule would have gone into ef­fect on Jan. 1, 2018, re­quir­ing ad­vis­ers earn­ing com­mis­sions on in­vest­ments to sign a legally bind­ing agree­ment putting their clients’ in­ter­ests ahead of their own. For now they can fo­cus on sell­ing con­sumers in­vest­ments that will gen­er­ate the high­est com­mis­sions, not what makes fi­nan­cial sense for the cus­tomer.

The les­son is per­haps the old­est in hu­man­ity: Ev­ery­one is out for them­selves. Credit agen­cies will un­der-in­vest in cy­ber­se­cu­rity to boost prof­its. Banks ex­ist to re­turn cash to in­vestors, not to look out for cus­tomers. Sales­peo­ple are sales­peo­ple, even when they are of­fer­ing fi­nan­cial ad­vice.

And U.S. law will not pro­tect you from any of this be­hav­ior.

The only so­lu­tion is to ed­u­cate your­self, and frankly, spend more of your own money on your fi­nan­cial se­cu­rity.

Amer­i­cans need to en­roll in credit mon­i­tor­ing ser­vices, mak­ing sure no one opens an ac­count with­out your ex­press per­mis­sion. You also should find a bank that charges for low-bal­ance check­ing ac­counts in­stead of charg­ing a hun­dred lit­tle fees.

You can also get what you pay for with fi­nan­cial ad­vice. Rather than speak with a “free” re­tire­ment plan­ner who makes money off com­mis­sions, pay a flat fee to an ad­viser whose only in­ter­est is mak­ing you happy.

The big­gest lie per­pe­trated by the dig­i­tal age is that you can get some­thing of qual­ity for free. We need to re­mem­ber that you’re go­ing to pay one way or an­other.

Take con­trol of your fi­nan­cial life, pay a fair price for the ser­vices you re­quire, and trust no one who of­fers you some­thing for noth­ing. The only per­son you can trust is your­self.

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