PROTECTING HIGH NET WORTH FAMILIES FROM CYBER CRIME

PROTECTING HIGH NET WORTH FAMILIES FROM CYBER CRIME Protecting your future since 1863 SM RAISE YOUR AWARENESS, LOWER YOUR RISK

THE CYBER MENACE Cyber crime is a trend growing as fast as the Internet boom itself. It seems that every day there s another identity theft story in the news that leaves us feeling vulnerable to this invisible threat. Anti-virus vendor, Norton by Symantec, reports that 71 million Americans were victims of cyber crime in 2012. And cyber crime is expected to become even more common in 2014. While the compromise of corporate networks gets most of the media attention, we as individuals should be concerned especially those with greater wealth and high media exposure. Now that personal information has become so hard to protect, your financial status is much easier to discover. Not only is our personal information at risk, our personal safety is also at risk. The explosive growth of mobile communications has created millions of new targets for criminals. Even our vehicles, home security systems and smart appliances can be hacked and used against us. Anything controlled by a computer or connected to a network can be compromised. Cyber crime is frightening because most of us don t fully understand the technology. But advice from cyber security experts may surprise you. Don Culpepper, who specializes in family safety and security at Fireman s Fund, recommends, The key to protecting yourself and your wealth isn t through a high-tech solution; cyber security is about awareness of your online activity. TOP CYBER RISKS Information Security is becoming more relevant every day, even for those who do not use the Internet regularly. Companies you do business with, such as banks, retail stores, etc., transfer your information digitally in the course of doing business so you re at risk. Think of all the personal information you use online while working, shopping, banking, investing, networking, learning, etc. Usernames, passwords, social security numbers, birthdays, nicknames, maiden names, favorite movies all of which are unique to you can be collected anonymously to commit fraud in many ways, and in your name. There are over 326 million mobile devices in the United States, more than the country s entire population. Cellular Telecommunications Industry Association (CTIA) Types of Cyber Fraud Utilities Fraud The opening of new utility accounts such as phone, electricity/gas, cable, etc. Finance Fraud The withdrawal of money, accrued debt, or establishing new bank accounts or loans in your name. Government Document Fraud False driver s licenses or official ID in your name to steal government benefits or file tax returns. Criminal Fraud The committing of a crime while assuming your identity. Job Fraud The use of your social security number and credit history to get a job. Once you ve become a victim of identity theft, it can be extremely difficult to resolve. Identity theft resolution programs are available to help restore your credit, but there are a few things you can do on your own if you suspect your identity has been stolen: Monitor your credit report and place a fraud alert on your file Close the accounts that you suspect have been tampered with or opened fraudulently File a complaint with the Federal Trade Commission File a report with your local police or in the community where the identity theft occurred Physical Security has become a greater threat to high net worth individuals and their families because their wealth makes them greater targets for crime, such as extortion or kidnap-and-ransom plots. Criminals can easily search the Internet to reveal your identity, financial status, residence, family members, etc. essentially building a profile. Just as in any law enforcement surveillance operation, building a profile helps predict where someone will be at any given time, making them vulnerable to a physical attack. Social networkers exacerbate this problem by posting their activities and location from mobile devices wherever they go. Smartphones use GPS to enable location services for a wide variety of apps. Known as geo-tagging; smartphones attach GPS information to photographs that criminals can use to locate victims. And because smartphone apps are susceptible to hacking, criminals can attach malware that they use to track your movements without your knowledge. The key to protecting yourself and your wealth isn t through a high-tech solution; cyber security is about awareness of your own activity. DON CULPEPPER FIREMAN S FUND RISK MANAGEMENT CONSULTANT It s no secret that children are naïve to the dangers of posting their personal information on public websites. Social networking puts them at even greater risk of unknowingly associating with a perpetrator who may target them because of your prosperity. 2

The practice known as pretexting is presenting oneself as someone else in order to gain private information. They may already have enough information to pretend they know your child, inspiring trust and thus, opening the door to trouble. Imagine taking your family on vacation to Hawaii while your child maintains a running dialogue on Facebook, Snapchat and Instagram, posting photos and comments about everything they are doing. Meanwhile, a criminal monitoring their activity would know that the family home is unoccupied and a target for theft. Or worse, an assailant can pinpoint where the family is at any time, making family members vulnerable to physical harm. Network Security is the side of cyber crime that most people know little about. It s important to understand that ANY device connected to a network can be hacked, Don Culpepper warns. The threat now goes well beyond desktop computers. Now our phones, televisions, video game consoles, security systems, cars, appliances and even your front door lock can connect to the Internet and be compromised. Certain types of network connections are more vulnerable than others. Bluetooth and WI-FI technology are extremely common protocols but offer very little security. Brian Valenza, president at the Guidry Group and a former U.S. Navy SEAL, is an expert in hightech communications and surveillance. He explains that criminals using readily available tools can fish for open devices on WI-FI networks and hack into them, whether they are password protected or not. WI-FI is particularly risky because it is widely used in public hotspots. Never do your online banking or purchase anything with a credit card from a public hotspot. WI-FI is the most common protocol for home wireless routers. Brian advises, It s important to provision your wireless router with a firewall that uses an encrypted password. It is equally important to make your router undiscoverable. This means the router name won t even show up on a WI-FI network scan. Criminals known as trunkslammers routinely prowl affluent neighborhoods looking for discoverable routers. Even if the router has a firewall, the criminal can hack the password and infiltrate your home network. Consider the notion that your home security system, with cameras and other high-tech features, communicates to a central office or the police department through an Internet connection. If a hacker can access your WI-FI router, they can also access and possibly control your security system. They could turn it off, or even turn the cameras against you. This is also an emerging risk with smart televisions and video game consoles that employ cameras to interface with users. You may be watching TV while someone else watches you. Tweet from teenage girl: Mom and Dad went to some fancy dinner and I have to stay home. #homealone #bored 91% of adults have a cell phone and 63% of them use their smartphones to go online. Pew Internet Project, by the Pew Research Center Off-the-shelf communications devices often come with a default password setting. Some are as simple as 0000 or Password, and easy to guess. Since most hardware manufacturers post their user guides online, these passwords are easily accessible to miscreants who may wish to cause you harm. CYBER FAMILY SAFETY AND SECURITY EVALUATION For many, cyber technology can be intimidating. Even tech-savvy business leaders have trouble keeping up with technology. What can you do to protect yourself and your family from the evolving threat of cyber crime? A personal security consultant, such as The Guidry Group s Brian Valenza, can determine specific areas of concern relating to your family s daily use of mobile devices, laptops, desktop computers, etc. while at home, during travel, or even at school or work. Through remote and onsite evaluation, the security review includes useful best practice recommendations that can ensure a heightened level of awareness, and therefore lower your family s overall level of risk. When we conduct a home consultation, we check for network vulnerability, Brian says. Businesses use a Virtual Private Network (VPN) to protect their information as employees communicate over the Internet. But when they go home or travel, and switch to their phone or other device to WI-FI, they become susceptible. In the cyber security world, Brian explains, criminals fish for information for the same reason as social media companies to gather information to create profiles on individuals. 3

They may sell the personal information to other criminal associates, or instead engage in corporate espionage, searching for product details or merger information. Many companies expect employees to use their personal devices at work, creating a security issue for both the company and its employees, especially business officers and executives. Not only do their personal devices contain competitive business information, but users often leave their corporate VPN connections open when they are not working, thus exposing the network. Some of the questions Brian asks a family during a cyber safety consultation are geared towards understanding the family s culture: How do they use the Internet, local devices, mobile devices, etc.? How do parents and their children use social networks; do they travel, do they post pictures? How old are the kids? Do they allow cell phones, mobile device or video game use 24-7? Do the parents know what their kids do online? Do they have rules/restrictions on how they use social media (i.e.: no device usage after 7 p.m.)? Do the parents really understand Facebook? By understanding the family s culture, Brian can offer practical ways to protect the family without changing their lifestyle. Parents may not even realize the vulnerability their children create. But a home consultation can educate parents on the technical details, such as what mobile apps do and how they operate. The rest is just common sense and discipline. HOW TO PROTECT YOURSELF AND FAMILY It seems that just as many risks have come with the Digital Age as benefits. But you don t need to be a computer expert to protect yourself and your family from cyber crime. Many personal security experts will tell you that simply raising your awareness is the key to cyber security. Raise Your Awareness, Lower Your Risk Becky Hudzik-Presson, assistant vice president of Personal Risk Services at Fireman s Fund, consults with high net worth customers on protecting themselves from cyber crime. She explains that technology and its associated risks are always evolving, but a few aspects remain constant. Criminals will continue to exploit social media and hack into the latest, most popular applications. Security experts continue to familiarize themselves with the latest cyber-exposures, but so do the criminals. Every year, hackers good and bad flock to the DEF CON conference to share the latest techniques and concepts showing just how communal this fraternity is. Tips to Protect Against Cyber Crime Use your mobile service provider s 3G (or higher) network for more secure mobile Internet communications Provision your home WI-FI router with a high-level encrypted firewall AND make it undiscoverable Monitor you children s social network and mobile computing activity, and stay up-to-date on privacy settings Work with a qualified security advisor who specializes in protecting high net worth individuals and families, and offers specific cyber protection advice Assure that you re adequately insured to withstand a loss Use sophisticated passwords and update them regularly We all have to take common sense approaches and precautions to reduce our cyber crime vulnerabilities, Becky says. Before you install your next app, enter a password, or provide private information, take a minute to understand the potential consequences to you or your family. The businesses you work with can also inadvertently pass their cyber crime exposure on to you. If you are newly wealthy, you might still be working with your local financial institution and other small companies that are not sufficiently protected against the cyber threat. It s important to validate your bank or financial institution s security protocols, Becky adds. Are their transactions secure and encrypted? Are there any weaknesses you should be aware of? Large, corporate firms generally employ robust network security protocols that address the most current cyber threats although no network is completely secure. Smaller local firms, however, don t usually have the financial resources or expertise to deploy such security systems. For this reason, it makes sense to manage your finances through a large, trusted institution. 4

Asking questions helps sharpen your awareness, but you may not have the expertise or tools to review your bank s security protocols. That s why it s a good idea to work with a private security advisor who can offer expertise in cyber security. They not only help with background research and network security on both a personal and enterprise level, but they also provide tips and education on effective measures you can take to guard against cyber crime. It is also essential to insure your assets and reputation should you suffer a loss due to cyber crime. Recovering your stolen identity or lost assets can be expensive and time-consuming. And if you are a business leader, politician, celebrity or other high net worth individual, restoring a damaged reputation can also be difficult and costly. Good insurance provides some reassurance that you can financially recover from a cyber crime. Not all insurance providers can meet your unique needs, so be sure to talk to your independent agent or broker. Not all insurance providers can meet your unique needs, so be sure to talk to your independent agent or broker. They can offer expert advice on coverage solutions and recommend the best insurance company to help protect your family against cyber crime. WHAT TO LOOK FOR IN AN INSURANCE CARRIER Because cyber crime is evolving so quickly, many insurance carriers have been slow to develop specific cyber-protection policies for individuals and families. However, such coverages are beginning to enter the market. Ask your independent insurance agent about providers that not only offer high limits excess policies, but actually specialize in high net worth personal insurance. Some excess policies even feature crisis management endorsements that can pay for a PR agency to help restore your reputation particularly valuable to corporate or non-profit executives and high-profile individuals. Additionally, it is essential that your insurance company understands your lifestyle and offers a cyber family safety service that addresses your unique needs. Some carriers offer an in-home safety consultation or they can recommend an international personal security firm with expertise in protecting wealthy individuals and families. With the many evolving facets of cyber crime, you need an insurer who stays on the forefront of family protection and continuously innovates to cover emerging risks. ABOUT FIREMAN S FUND Since 1863, Fireman s Fund has partnered with independent agents and brokers to protect the future for individuals, families and businesses. We ve helped rebuild cities, pioneered new insurance solutions and managed risk for the world s most popular films. Today, we are industry leaders in high net worth, entertainment and commercial insurance. Backed by superior claims and risk services, we re there for our customers before, during and after they incur a loss. We are a member of the Allianz Group one of the world s largest insurance providers and have a strong financial foundation. Fireman s Fund began with a promise to support firefighters in their mission to make communities safer. We continue this tradition through our Heritage Program and contribute a portion of our profits to fire service organizations across the United States. For more information, visit firemansfund.com. This article provides general information and recommendations that may apply to many different situations. Any recommendations described in this article are not intended to be specific to your unique situation. Consult with your insurance company and specialists to determine how and whether the information in this article might guide you in developing specific plans or procedures for your home. This article does not substitute for legal advice, which should come from your own counsel. Any description of insurance coverage is a partial summary of coverage available. Your actual coverage will depend on the terms and conditions of your policy and the limits you select. The policy may contain exclusions and limitations that are not detailed in this article and coverage may differ by state. 2014 Fireman s Fund Insurance Company, Novato, CA. All rights reserved. LR 3.14 60477-03-14 5