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Investment Account Fraud Prevention

By Ryan Kaiser, CFE, Assistant Vice President, Fraud Risk Officer, Canandaigua National Bank & Trust

Many Americans are utilizing investment accounts to build wealth. In fact, sums held in investments often exceed what would typically be held in a checking or savings account. Additionally, the average consumer likely does not check in on their investment account activity as often as they review their checking account balance. What does this all add up to? Vast opportunities for fraudsters to target unsuspecting consumers. Read on to learn how can protect your accounts.

Fraud risk factors associated with investment accounts include:

  1. Unauthorized account access: fraudsters source valuable personal information from an account profile, for the purpose of conducting identity theft schemes later. Alternatively, a bad actor may conduct account reconnaissance to identify an opportune time to conduct financial fraud.
  2. Unauthorized transaction attempts: within the context of a 401(k) account, this could be a loan or distribution request, or in the case of a brokerage account, a sale of stock or fraudulent withdrawal.

To protect yourself from becoming a victim, consider the following best practices:

  • Use strong, unique, lengthy passwords which are updated regularly.
  • Safely dispose of documents containing sensitive information.
  • Use multifactor authentication on your investment account(s), if available.
  • Utilize account alert features. These notifications trigger when certain conditions occur, such as failed login attempts, password changes, or transaction attempts.
  • Beware of phishing, SMShing, and other social engineering attempts – do not click on suspicious links or engage with individuals you are unsure about.
  • Safeguard devices with biometric mechanisms (fingerprint or facial recognition).
  • Keep devices up to date, including system updates and anti-virus/malware software.
  • Do not use public computers or unsecured WiFi connections to conduct financial transactions.
  • Regularly check account statements for errors or unauthorized activity.

In the event your account is compromised, consider the following steps:

  1. Notify your financial services provider of the event immediately.
  2. Close compromised accounts and open new ones.
  3. Continue monitoring for additional suspicious activity.
  4. Consider placing a credit freeze or fraud alert.
  5. Monitor your credit report for potential signs of identity theft.
  6. Consider having impacted personal devices checked by an IT professional.
  7. Notify law enforcement, particularly if a loss occurred.

Our team is ready to answer any fraud prevention questions you may have. For current articles and additional resources, visit

©2023 Broadridge Investor Communication Solutions, Inc. All rights reserved. This material provided by Ryan Kaiser.