It's never a good season to leave your online accounts vulnerable to hacking attacks or theft. And when the holidays roll around, the scammers aren't taking vacation: They're boosting their efforts just as you already face extra risks.
To avoid becoming a victim, it's not enough to just stay away from relatively obscure little online storefronts. Many large companies have reported serious security breaches over the years:
Back in 1994, Russian hackers grabbed $10 million out of Citigroup's (C) Citibank accounts.
Last year, Sony (SNE) was hit, and 25 million people who played games at Sony Online Entertainment had information such as credit card numbers stolen.
Just a few months ago, Bank of America (BAC), JPMorgan Chase (JPM), Wells Fargo (WFC), U.S. Bank (USB), and PNC (PNC), a veritable who's-who of the financial world, had their online banking systems attacked. The major damage seems to have been inconvenience, with millions of customers unable to access accounts for a while.
Thus, the best strategy is to be smart about your online behavior at all times, no matter where you surf. With passwords, for example, choose strong ones, such as those that are not common words or names, and that combine letters, numbers, and symbols in upper and lower cases.
Change your passwords regularly, too, and don't have the same password for lots of sites. If your account at one company is hacked into and a troublemaker has your password, you don't want him to be able to use it to access your other accounts elsewhere.
One way to generate a complex password is to think of a sentence that you can remember, such as "It looks like rain today." Then grab the first (or last!) letter of each word, to get i-l-l-r-t. Then add some numbers or other characters to the mix, as well as a little upper or lower casing.
Here are some of the kinds of scams to keep an eye out for, now and throughout the year:
Beware of "phishing," which involves your being asked for personal information -- perhaps in order to access a prize you've won (or to enter into a contest for a prize), or to access a deep-discount coupon. A few years ago, these scams arrived by email; today you can be phished via texts or even come-ons on Facebook (FB). If anything seems too good to be true, think twice. And even if something seems to be an ordinary drawing for a prize, don't rush to submit your personal information. You have a small chance of winning and a bigger chance of being defrauded.
Likewise, be wary when companies you know seem to be approaching you and requiring information, perhaps after scaring you. You might receive an email from your bank, for example (and it will likely look a lot like a real email from your bank), alerting you to a supposed security breach and asking you to click a link to verify some information. Don't click. Don't submit information. If you're worried about it, look up the company's phone number on your own (don't use a number provided in the email) and ask about it. These come-ons take many forms.
Know that even some apps that you download onto your smartphone may be malicious, grabbing valuable information and perhaps trying to infect and steal from your friends and contacts as well. Free apps are more likely to be problematic than ones you pay for -- but of course, there are plenty of good apps that happen to be free, as well.
Know that scammers play on basic emotions such as fear and greed. They may tell you that you've got a virus and offer to solve the problem for a fee, for example. Or they might masquerade as the U.S. Postal Service, UPS (UPS), or FedEx (FDX), saying that they need some information from you before they can deliver a gift or something you ordered. Scammers will also pose as charities, and they can be convincing and persuasive. Even free screensavers you're offered can actually be malicious.
You can protect yourself from many of these dangers by maintaining a suspicious attitude and erring on the side of caution. Be sure to have security software running on your electronic devices, too. Don't befriend strangers on social networking sites. And don't announce that you're on a trip (and thus have left your home empty and available to thieves). Share your vacation photos on Facebook only after you return. Minimize the personal information you store online and in social networks, too, such as your birthday, phone number, and address.
The online world has many wonderful things to offer us, but it can take more than it gives, if you're not careful. Be smart online, now and throughout the year.
Longtime Motley Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of JP Morgan Chase, but she holds no other position in any company mentioned. The Motley Fool owns shares of Bank of America, Wells Fargo, PNC Financial Services Group, JPMorgan Chase, Citigroup, and Facebook. The Motley Fool has sold shares of Sony short and has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of FedEx, United Parcel Service, Wells Fargo, and Facebook, and have recommended creating a diagonal call position in FedEx.
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