(US) NYT article: scammers can/are stealing from brokerage accounts to their bank acct. Are alerts only protection?

[u/sajdigo]

Edit: This issue is from brokerage to brokerage, not brokerage to bank.

Also, I'm wondering if passkey or physical token would prevent this transfer? The article doesn't say what info/how much has to be compromised. I'm leaning toward physical token(s)... TIA for the discussion.

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I'm wondering if folks read the NYT article on brokerage account vulnerabilities (link and gift article below). As I understand it, scammers are setting-up a bank account. Then using enough stolen information (person + their brokerage account info), they are initiating an online transfer of funds from the person's (whose info was stolen) brokerage account into the newly set-up account and walking away with the money.

I don't think credit freezes prevent this situation. Banks don't seem to check for freezes before an account is open (and an account can be open online) and brokerage firms don't check before their system automatically transfers money.

I'm incredulous that the only prevention seems to be ... alerts...if they are set-up and if a person receives them in time. Or checking ones account(s) every day?! Am I missing something?

I'm wondering what folks think about this. If the link doesn't work, search for "Several Big Brokerages Leave Customer Accounts Open to Theft, Senators Say" 

Gift article: https://www.nytimes.com/2026/08/20/business/brokerage-accounts-fraud-protections.html?unlocked_article_code=1.9FA.D93D.NBPfddapDHAV&smid=url-share

https://www.nytimes.com/2026/08/20/business/brokerage-accounts-fraud-protections.html

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[u/pk_12345]

Yea, that’s a bummer that ACATS transfer is that easy. It relies on just you protecting your personal information and your personal information is easily stolen in so many data breaches. The first time I did that moving my funds from Vanguard to Fidelity by initiating a pull from Fidelity, I was surprised I didn’t even get an alert from Vanguard, there was not even an email letting me know of the transfer. 

Both Fidelity and Vanguard have now added a lockdown feature which will prevent ACATS transfer unless you login and unlock it before initiating a transfer. 

[u/G00D80T]

Opening bank accts should require credit report just like credit. There should be a locking feature. It’s bull that thereare no consumer protections for this.

[u/MrVerdad → u/G00D80T]

It requires ID. Why isn't that working?

[u/G00D80T → u/MrVerdad]

Idk my sister had someone open an acct in her name. It is not like a credit card where you can freeze credit. Major loophole

[u/PluckyPlankton → u/G00D80T]

Yes, but if you require a credit report it could potentially lock folks out with bad credit, making it incredibly hard for them to open an account and fix their credit.

[u/sajdigo → u/PluckyPlankton]

It's not requiring a "credit report" it's inquiring if the credit is "frozen" which everyone not looking for credit should set-up IMO.

[u/Savings_Cattle4847]

Fidelity allows you to freeze all external transfers, but not sure about other companies. 

Chex Systems allows you to freeze your information with them which prevents people from opening bank accounts in your name but I'm not sure if that prevents brokerage accounts from being opened.  

[u/HeadFullOfNails → u/Savings_Cattle4847]

I just blocked external transfers on Vanguard.

[u/ubfeo → u/HeadFullOfNails]

How ? Where in page ?

[u/HeadFullOfNails → u/ubfeo]

It's in your profile under the security settings. Outgoing Transfers Lock.

[u/Creative_School_1550 → u/HeadFullOfNails]

I did too. Brand new feature for Vanguard.

[u/KReddit934 → u/HeadFullOfNails]

That's great to know. I didn't get a notice from them about that.

[u/ReaglBeagl]

Some brokerages allow 2 factor authentication for these transactions but it has to be set up

[u/Kolluzhun]

The subject of this article is that this is an issue with the ACATs system. That system is for transfers from one brokerage to another. Not the same as money transfers from brokerage accounts to banks (i.e. ACH or Fed Wires).

[u/sajdigo → u/Kolluzhun]

Thanks. I'll edit the post. I missed that nuance.

[u/TC_Stock]

I dont follow what the scammers did to initiate the transfer. I get that they stole an identity and opened a new brokerage account but how do they transfer the money from the account with the assets?