Cyber

Lawsuit Alleges Plan Sponsor Need to Plan Better for Cyber-attacks

08.24.2020

Since the dawn of the COVID-19 shutdown that has caused more businesses to a remote environment, cyber-hackers have had ample opportunity to steal plan participant credentials and personal information. The lawsuit, Bartnett v. Abbot Laboratories et al., No. 2020 CV 2127, (N.D Ill. Filed April 3, 2020), alleges the intense efforts digital fraudsters often carry out in order to steal assets from retirement accounts.

According to the suit, the defendants allegedly failed to utilize the level of skill, care, diligence, and prudence demanded of an ERISA plan fiduciary to effectively safeguard plan participant assets. As a result, a data breach allowed an adept cyber-criminal to funnel $245,000 from a plan participant’s account! Per the complaint, the cyber-thief already had personal information about the participant in its possession before accessing the plan participant’s account, including her date of birth and the last four digits of her social security number. What’s more, the cyber-criminal was also able to obtain her email in order to send and receive authentication codes.

Consequently, hackers have several clever ways to take plan participant information, including jotting down personal information off of company websites to crack simple company and personal passwords. These actions result in criminals applying for a government benefit, filing a tax return and enjoying a tax refund, opening new credit cards, relishing in credit card rewards, and funneling cash from an investment or banking account.

To prevent cyber-attacks from taking place, we recommend you establish a bullet-proof cybersecurity plan. This includes generating complex passwords with uppercase and lowercase letters and special characters. What’s more, be sure to monitor your company’s transactions, regularly check your credit reports, utilize secure websites, and shred any vital documents no longer needed.

Sensitive information such as social security numbers, bank account information, and addresses, are very appealing to cyber-criminals. When effective cybersecurity measures are disregarded, plan sponsors who head employee benefit plans for their company are at risk of forfeiting these valuable items. At Colonial Surety Company, we never want your company to be unprepared in the event a cyber-breach occurs. That’s why we have Cyber Liability Insurance for plan sponsors!  Our cyber protection covers both the company and the company’s retirement plan. Cyber Liability Insurance is available in our two-to-three-year ERISA bond packages, which include ERISA coverageFiduciary Liability Insurance, and Cyber Liability Insurance, to give you the best value of coverage you can’t get anywhere else! Click here to get the coverage your company and its employees deserve.