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J.P. Morgan Accounts Prove To Be Fraud-Friendly
Posted by Pile
(10149 views)      [E-Mail link]
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[Get-Rich-Quick] |
One moment Dave DeSmidt had $179,000 in his 401(k) retirement account, the next he had nothing. In an instant, 25 years of savings had disappeared.
With a few clicks, someone raided DeSmidt’s retirement account with J.P. Morgan & Co and ordered a full disbursement to a private checking account. |
Then came the really bad news. While credit card and online banking accounts are legally protected in the event of fraud, DeSmidt’s brokerage account came with no such insurance. Two months after the theft, his balance still read $0.
With hacking of brokerage accounts increasing, the legal gap facing DeSmidt and other victims has regulators and critics debating the need for new consumer protections.
‘I don’t have a clue’
The theft was the shock of a lifetime for DeSmidt, who plans to retire in a few years with his wife in their Mukwonango, Wis., home.
"That was a pretty good chunk of what we were going to retire on," DeSmidt said. "I don't have a clue how it happened."
The theft occurred on Oct. 23, while DeSmidt was on assignment for his company in China, near Shanghai. Just before lunch, someone else logged onto J.P. Morgan's Web site from a computer connected to the Internet through Comcast Cable Communications in Cherry Hill, N.J., and entered DeSmidt's user ID and personal access code.
While DeSmidt slept on the other side of the world, his imposter found that he had a balance of $179,000.43 in his account. A few more clicks, and the DeSmidts’ linked checking account was changed to a Bank of America account and an electronic transfer of all available funds was requested.
A flurry of e-mail, faxes and registered letters followed. JP Morgan ordered an investigation, and sent the results to DeSmidt on Dec. 1.
"J.P. Morgan concludes there was no external or internal breach of controls with the J.P. Morgan environment," the report said. "Access and authentication controls established within J.P. Morgan worked appropriately."
The report dismissed the possibility that the crime was an inside job, as the request came from outside computers and the criminal knew DeSmidt's user name and password.
The report's conclusion: "Investigation Status: Closed."
Uh oh... maybe if a national media company gets involved things might change?
I don't know about everyone else, but not all brokerage accounts are obviously created equal. It's not easy to transfer funds electronically, I guess, unless you are using J.P. Morgan! |
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