The unfortunate experience of a military retiree who recently had his retired pay stolen from his bank account offers a stark reminder to be vigilant about our finances.
On Oct. 1, retired Air Force Lt. Col. Bob West checked his account at his Texas bank and realized his military retirement pay hadn’t been deposited.
He called the bank and the Defense Finance and Accounting Service, and he discovered that a thief had called DFAS on Sept. 18 and diverted the pay to an account at a financial institution in Utah — and had already withdrawn $500 from the fraudulent account.
The financial institution agreed to freeze that bogus account, and by Oct. 7, DFAS had returned the money to West’s valid bank account.
If you don’t routinely check your bank account to make sure your pay is received, you might want to start. Uncovering the theft so quickly helped West avoid even more headaches — such as bounced checks and debits.
An official from West’s bank said the receiving bank doesn’t get a notification from the originator of the payment (such as DFAS or a private employer) when a change is made, and the bank processes tens of thousands of Automated Clearing House transactions daily, which include direct deposit payments.
“That is one of the reasons we encourage customers to review their account activity on a regular basis,” the official said.Under the Electronic Fund Transfer Act, typically an account holder can avoid losses associated with fraudulent activity if an error is reported to a bank within a reasonable time.
But West is still puzzled over how the thief could have gotten access to his personal information, such as Social Security number, date of birth and rank, which the thief used to gain access to West’s DFAS account simply by calling a customer representative.
“DFAS is aware that some criminals intent on committing fraud can obtain personal information through a variety of sources,” said DFAS spokesman Steve Burghardt. DFAS has security protocols when dealing with people calling the customer service representatives, such as asking a number of random questions, he said.
Active-duty members’ DFAS accounts can’t be changed by phone; the military requires all active-duty troops to use online myPay accounts for transactions such as changing electronic funds transfer account information. But retirees may change bank accounts for their retired pay by phone, myPay or regular mail.
Whether you’re on active duty or retired, it’s worth taking a few regular steps to protect yourself:
■ Check your accounts often; don’t wait for a monthly statement. Make sure deposits happen when they should, and that no one is racking up charges on your credit card. Find out what notifications your financial institution provides by text or email when certain transactions are made.
■ Don’t use a public computer or kiosk system to access myPay.
■ Keep user IDs and passwords safe; don’t store them on your computer or mobile device.
■ Install, use and update anti-virus software and personal firewalls.
■ The Federal Trade Commission advises being very suspicious of any request, by email, phone or regular mail, for your personal information. Neither DFAS nor financial institutions will ask you for your personal information unless you initiate the call.
■ Before sharing personal information anywhere — workplace, doctor’s office, a business, your child’s school — ask why it’s needed, how it will be kept secure and what happens if you don’t provide it.
■ Lock your financial documents and records in a safe place; and lock your wallet or purse safely at work. Limit cards and documents you carry.
■ Shred receipts, credit offers and documents with your personal information when you no longer need them.
■ Look for the “lock” icon on the status bar before you send personal or financial information online. Before sending personal information over your a laptop or mobile device on a public wireless network, make sure it’s a secure network.
