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This Mistake Could Ruin Your Financial Life

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Last week, microblogging service Twitter suffered a serious security breach. You could be next.

A hacker used time, sleuthing, and common tools to crack open a Twitter employee's Gmail account and download hundreds of sensitive company documents. Any of us could fall victim to an attack like this, and there's more than embarrassment at stake.

A March report from HSBC Direct (NYSE: HBC  ) found that 49% of the online population banks via the Web, up roughly 23% in two years. Online banking offers customers greater efficiency and convenience, and all the major financial institutions, including Bank of America (NYSE: BAC  ) , American Express (NYSE: AXP  ) , Citigroup (NYSE: C  ) , and JPMorgan Chase (NYSE: JPM  ) ,  have online options. Most of them are secured via proven technology from VeriSign (Nasdaq: VRSN  ) , while others employ the services of digital safekeepers such as VASCO Data Security (Nasdaq: VDSI  ) .

Still, the password that protects your online bank information is only as good as it is difficult to decipher. Make it too easy, and you've got a serious problem. Here are three tips for making a hacker's job harder.

1. Use uncommon words.
The easiest passwords to guess are those that identify with us -- a last name, a child's name, a birthday, the name of a favored pet. Make the hacker's job harder by dabbling in cognitive dissonance, or by using gobbledygook. Have a dog named Frank? Make your password "stalactite," after the cave-dwelling rock formation.

2. Combine unrelated phrases.
Better yet, take "stalactite" and add a word to create a meaningless phrase. (Well, mostly meaningless, since it will be your password.) You can make the process fun by using one of the Web's many random word generators. One I just used returned "squeeze." New password: "stalactitesqueeze." Random. Meaningless. Awesome.

3. Use plenty of symbols.
But maybe not awesome enough. These are just words, after all, and a safecracking computer can bombard a portal with dictionaries of words and phrases until the right combination appears. You're better off adding symbols to your word or phrase of choice: "st@l@ct!te-squ3eze." Harder to guess, right? This still probably isn't perfect, because of the varying loopholes in Web security, but it'll be better than most passwords.

Yes, you should take this personally
Hackers are smart, resourceful, and equipped with a terrific variety of tools for stealing from us. YouTube alone shows 21,900 hits for videos related to "hacked password." There, you'll find plenty here's-how-you-bust-down-a-digital-door tutorials for miscreants. We're far more vulnerable than we'd care to admit.

What can we do about it? Be vigilant. Carefully watch our financial accounts. Balance our checkbooks, track our brokerage transactions, and double-check our credit-card statements every month. Because digital technology, no matter how good it gets, will never be enough to stop the most enterprising hacker. Personal security is still personal.

Bank on related Foolishness:

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. VASCO Data Security is a Motley Fool Stock Advisor selection. American Express is a Motley Fool Inside Value pick. Try any of our Foolish newsletter services free for 30 days.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool owns shares of American Express and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is shivering on a summer day. What gives?


Read/Post Comments (4) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 23, 2009, at 10:26 AM, catoismymotor wrote:

    + 1 Rec with sprinkles!

  • Report this Comment On July 23, 2009, at 12:16 PM, uradouchebag wrote:

    Sorry dude but you could have a 128 character password with numbers, letters, symbols, etc and it doesn't mean jack if you do not know how to effectively detect, combat and prevent malware. Every article written on safe passwords should also address the concern of malware. The leading cause of password and identification theft nowadays, especially those that target bank accounts and credit cards, are not related to brute force password cracking but moreso due to malware installing keyloggers such as the Zeus botnet. "Gee no one will ever guess my password!" Yeah, if you have a keylogger installed because you were surfing pr0nZ, they don't have to guess, they just wait until you type it in and send it right to them. Yes I applaud your attempt to ween people of their "ilovemycat" passwords but without addressing the malware aspect, you addressed only half the issue. I'd bet a million dollars that's because you aren't aware of it and are probably infected right now and they already have your "%@h4G4~9lH*0`" password right now. This article = EPIC FAIL.

  • Report this Comment On July 23, 2009, at 12:56 PM, TMFMileHigh wrote:

    >>I'd bet a million dollars that's because you aren't aware of it and are probably infected right now ...

    Excellent! When I can expect my million? (Grin.)

    I understand what you're trying to address here and I, too, applaud your efforts. But malware is a separate issue best addressed in a separate column. The Twitter hack had zero to do with keylogging.

    Thanks much and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On July 26, 2009, at 9:12 PM, jimmythecdawg wrote:

    m.verisign.com will take you to the easiest solution for combating malware. Using VeriSign Identity Protection, it puts the power in your hands with true two-factor authentication (using your cell phone). One device that can be utilized on over multiple online applications for banking, brokerage, pharmacy health care, and even social networking will become the must have in fighting fraud.

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Tim Beyers
TMFMileHigh

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.

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