Security of online brokers

Discussion in 'Retail Brokers' started by yabz, Feb 1, 2004.

  1. yabz


    There have been threads on this forum already about members who have had their accounts hacked; fortunately they didn't lose any money, but I've lost quite a lot of sleep thinking about it. Everytime I login I'm expecting to see my account cleaned out.

    I've been hacked a couple of times. Once the hackers guessed the password for my mail account. Another time they used a security hole in Linux to break into my webserver. Fortunately the damage was limited. In the first instance they used my account for sending out spam, and in the second they defaced several of my webpages. In fact I should be grateful because they taught me an important lesson: computers are not secure and never will be.

    I split my accounts between 2 online brokers, but am wondering what would happen if, when, my account was hacked. Who would be responsible? If my bank balance is hacked the bank would indemnify me. What about a online broker?
  2. Good questions. In reality I think the risk is more with unauthorized account trading then with removal of cash. All brokers I know send confirmations of bank account and address changes to your old contact information which gives you time to react.

    I use IB and they now offer a device that generates a response code to their challenge. It can't be hacked and is used for money transactions. I think you can also set it up for entry to their trading platform.

    I'm more concerned with direct debits on my checking account. Anyone I have ever written a check to knows my account number and bank routing info. But if you timely report this, you're not liable.
  3. yabz


    Suppose your email account is hacked? The hackers could intercept the confirmations.

    In theory. I'm coming to the conclusion that that sentence is an oxymoron. I would be happier if the brokers were to say: "We are so confident that it can't be hacked that if anyone succeeded in doing so we will refund you your money"