Digitally, who has your back? Not a soul
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.