A terrifying thought I sometimes have is to finally retire with my 401(k) only to have a cyber attack wipe out all the assets I spent my entire career accumulating.
In: Technology
Even if you got your funds wiped from a cyberattack, any bank worth its salt will keep cold backups of the information stored in its databases and insurance against theft so they can just put that money straight back in, probably pending an investigation.
It depends on what you mean by “hacking”. The kind of hacking that’s portrayed in movies and TV is usually somewhat analogous to breaking into a house by smashing a window – nobody, not even authorized users, are supposed to get in that way. Any halfway competent bank will have many different systems in place that will make it easy to detect unauthorized modifications to account balances, and to restore the correct balances. It’s kind of like how if you broke somebody’s window to break into their house, they’d definitely notice once they got home.
The kind of hacking that’s much more practical and common is to steal account credentials (usernames, passwords, social security numbers, etc), log in as you, and transfer money out to another account. This is analogous to stealing somebody’s house key and walking in the front door. From the bank’s perspective, this just looks like you actually wanted to transfer the money, so it doesn’t raise any red flags. That’s why protecting your account credentials (using strong passwords, a different password on every account, setting up two factor authentication, etc) is so important.
Now, if this ever happens to you, you may still have some recourse. E.g., if the hacker transferred money from your account to a different account at the same bank, the bank might just be able to reverse the transaction. However, if the hacker transferred money from your account to an account at a different bank – especially if it’s a bank in another jurisdiction that doesn’t play nicely with your country’s law enforcement – then you may be SOL. Depending on how nice they’re feeling, the bank may just give you the money back from their own pockets, but this isn’t guaranteed.
If it eases your mind at all, a ton of cyber security is geared towards protecting money in banks. Both the banks and the government have it in their best interests to keep the money protected, so it’s not likely that your money would get stolen from the bank.
What a lot of scammers try to do (with an unfortunately high success rate) is trick people into giving them bank account logins or to transfer money to them with the promise that they’ll pay it back. As long as you don’t give anyone your account details to a mysterious person over email/phone who’s claiming to be a bank employee or the IRS, you shouldn’t have to worry.
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