After 2017’s Equifax security breach, consumers are becoming more aware of the risks of sharing financial information online. But are families exercising the same caution with 529 savings plans?
To a fraudster, a 529 account is no different than a checking or savings account, and if your information gets into the wrong hands your child’s college savings may be at risk.
Recently, 21 Connecticut Higher Education Trust (CHET) 529 plan account owners became victims of cybercrime. In an official statement , Connecticut State Treasurer Denise Nappier said there were 44 unauthorized withdrawals from CHET accounts totaling $1,416,635. Account owners’ personal information was stolen from an unknown source and used to access the 529 accounts. However, there was no indication that personal information was stolen from CHET’s website or from TIAA-CREF Tuition Financing (TFI), the program manager for the plan
According to a spokesperson for TFI, “The facts of this incident point to the fraudster(s) as having personally identifiable information of account owners from a source other than CHET, TFI or its associated vendors and using it to gain unauthorized CHET account access and illegally redirect payments.”
TFI said it will fully restore all of the college savings accounts affected by the incident and offer account owners two years of identity fraud protection services and $1,000,000 in identity left insurance coverage. They are also working with the state treasurer’s office to enhance systems, create more internal controls and conduct extra manual reviews to help protect against future fraudulent activity.
“Our account owners’ privacy and the security of their data are critically important, and we recognize that an incident like this can be disconcerting. We will continue to work closely with the state treasurer and law enforcement agencies as well,” said TFI’s spokesperson.
How to keep your 529 plan safe
Online banking fraud can happen to anyone, in a number of different ways. There’s hacking, phishing, online identity theft – just to name a few. While some cases are unavoidable, there are a few things you can do to keep your college savings safe:
- Complete all security questions when setting up your online accounts.
- Never click links in email messages, even if they appear to come from the plan provider.
- Never give account information to unsolicited callers.
- Use different passwords for each of your online accounts and sign up for two-step authentication if available, especially financial and email accounts
- Secure your home WiFi and never login to your accounts while using a public network
- Regularly monitor your online accounts for unauthorized or suspicious activity.
Unfortunately, in today’s digital world your personal information is never 100% safe from fraud but taking certain precautions can help mitigate your risk of becoming a victim.