Cyber Security Tip ST06-004: Avoiding the Pitfalls of Online Trading
Online trading can be an easy, cost-effective way to manage
investments.
However, online investors are often targets of scams, so take
precautions to
ensure that you do not become a victim.
What is online trading?
Online trading allows you to conduct investment transactions over
the
internet. The accessibility of the internet makes it possible for you
to
research and invest in opportunities from any location at any time.
It also
reduces the amount of resources (time, effort, and money) you have to
devote
to managing these accounts and transactions.
What are the risks?
Recognizing the importance of safeguarding your money, legitimate
brokerages
take steps to ensure that their transactions are secure. However,
online
brokerages and the investors who use them are appealing targets
for
attackers. The amount of financial information in a brokerage’s
database
makes it valuable; this information can be traded or sold for
personal
profit. Also, because money is regularly transferred through these
accounts,
malicious activity may not be noticed immediately. To gain access to
these
databases, attackers may use Trojan horses or other types of
malicious code
(see Why is Cyber Security a Problem? for more information).
Attackers may also attempt to collect financial information by
targeting the
current or potential investors directly. These attempts may take the
form of
social engineering or phishing attacks (see Avoiding Social
Engineering and
Phishing Attacks for more information). With methods that include
setting up
fraudulent investment opportunities or redirecting users to malicious
sites
that appear to be legitimate, attackers try to convince you to
provide them
with financial information that they can then use or sell. If you
have been
victimized, both your money and your identity may be at risk (see
Preventing
and Responding to Identity Theft for more information).
How can you protect yourself?
* Research your investment opportunities – Take advantage of
resources
such as the U.S. Securities and Exchange Commission’s EDGAR
database and
your state’s securities commission (found through the North
American
Securities Administrators Association) to investigate companies.
* Be wary of online information – Anyone can publish information on
the
internet, so try to verify any online research through other
methods
before investing any money. Also be cautious of “hot”
investment
opportunities advertised online or in email.
* Check privacy policies – Before providing personal or
financial
information, check the web site’s privacy policy. Make sure
you
understand how your information will be stored and used (see
Protecting
Your Privacy for more information).
* Make sure that your transactions are encrypted – When information
is
sent over the internet, attackers may be able to intercept
it.
Encryption prevents the attackers from being able to view
the
information.
* Verify that the web site is legitimate – Attackers may redirect
you to a
malicious web site that looks identical to a legitimate one. They
then
convince you to submit your personal and financial information,
which
they use for their own gain. Check the web site’s certificate to
make
sure it is legitimate (see Understanding Web Site Certificates
for more
information).
* Monitor your investments – Regularly check your accounts for any
unusual
activity. Report unauthorized transactions immediately.
* Use and maintain anti-virus software – Anti-virus software
recognizes
and protects your computer against most known viruses. However,
because
attackers are continually writing new viruses, it is important to
keep
your virus definitions current (see Understanding Anti-Virus
Software
for more information).
* Use anti-spyware tools – Spyware is a common source of viruses,
and
attackers may use it to access information on your computer. You
can
minimize the number of infections by using a legitimate program
that
identifies and removes spyware (see Recognizing and Avoiding
Spyware for
more information).
* Keep software up to date – Install software patches so that
attackers
can’t take advantage of known problems or vulnerabilities
(see
Understanding Patches for more information). Enable automatic
updates if
the option is available.
* Evaluate your security settings – By adjusting the security
settings in
your browser, you may limit your risk of certain attacks (see
Evaluating
Your Web Browser’s Security Settings for more information).
The following sites offer additional information and guidance:
* U.S. Securities and Exchange Commission
–
http://www.sec.gov/investor/pubs/cyberfraud.htm
* National Consumers League –
http://www.fraud.org/tips/internet/investment.htm
_________________________________________________________________
Author: Mindi McDowell
_________________________________________________________________
Produced 2006 by US-CERT, a government organization.
Note: This tip was previously published and is being re-distributed
to increase awareness.
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