Your Online Account May Have Been Breached? Don’t Just Sit There. Do Something.
Too many people respond with a shrug and maybe change their password. That’s asking for trouble.
3 min
How do consumers respond when their online accounts are exposed to hackers? Many of them simply don’t.
Data breaches at major firms have become all too common, with more than 110 million user accounts exposed in just the second quarter of 2023. Yet our research found that nearly two-thirds of U.S. consumers would return to a site after they were notified of a breach—with only the bare minimum of precautions, like changing their passwords.
Almost a quarter of the roughly 200 people we surveyed said they would return to the compromised website with no changes to their behavior at all. Only 10% said they wouldn’t go back.
Even people who had cybersecurity training within the past 90 days—in other words, people who should be primed to protect themselves—took risks. In this subsequent study, over a quarter of roughly 500 people said they would return to the breached website while taking the absolute minimum security measures, and only about 9% would take more-complicated steps such as setting up two-factor authentication. And they would do that only if they experienced real financial consequences, like fraudulent charges on their credit cards.
Why wouldn’t people protect themselves? Many of the consumers we surveyed believed that there were few—if any—alternatives to the websites they used frequently, and all websites seemed to be affected by data breaches. Why bother beefing up security? Likewise, some people said they would stick with a compromised site because they had put so much time and effort into their presence on it—a classic sunk-cost fallacy.
Since doing nothing may put your finances and personal information at risk, what should you do in case of a breach? Based on my experience as a researcher in this domain and guided by input from customers recovering from data breaches, I recommend the following actions.
The first steps
Take each data-breach notification seriously. Immediately change passwords on the affected sites and sign up to follow the updates from the breached firm. This is also a good time to ensure your passwords are unique and not being used across several sites.
Find out what kind of breach it is. Some breaches violate your privacy—such as stealing your playlist or viewing preferences—but may not be as damaging as other hacks. So they may just require a simple password change on the affected site. Even the breach of encrypted password data, such as in the LastPass data breach, while serious, isn’t an immediate threat.
On the other hand, things like compromised credit-card numbers, financial data and personally identifiable information need stronger attention. Even seemingly innocuous breaches of social-media networks may reveal data that can be used to impersonate you and perhaps be used to invade the privacy of those around you. For instance, hackers might be able to figure out your “forgot password” questions on websites by learning where you grew up, the names of your pets and more.
The next steps
Set up push notifications for financial data. When you’re notified of data breaches that involve credit cards or payment information, review the transactions on the affected accounts, going back to the previous payment period. Whether or not there has been unusual activity, protect yourself by adding mobile push notifications for credit-card transactions—an option offered by most credit cards, online-payment mechanisms and banks. Most notifications happen in real time, so consumers affected by data breaches can quickly identify and contest improper charges.
Use free credit monitoring. Some credit cards and banking firms such as Discover and Chase provide free monitoring of consumer credit and provide monthly updates of noteworthy events and changes. Some go further and provide benefits such as removal of your personally identifiable information found on public sites, including data brokers. Using these services is an easy way to identify and report fraudulent activity, as well as protect against identity theft—so review this data regularly if your information has been exposed.
Enable dual-factor authentication on all of your accounts. This is a good practice in general but is especially important for anyone affected by data breaches. With dual-factor authentication, you enter your password as usual but then confirm your identity using a personal device, typically a mobile phone. This limits someone from logging into the account with a stolen password.
If your social-media platform has been breached
Along with enabling dual-factor authentication, there are a number of steps you should take in the event of a social-media breach.
First, change the password and log in with the new one. Check the login-activity page to see if anyone other than you has logged in, and then look for the option to delete all other active sessions—so every other device that is currently logged in is effectively logged out.
Also review all direct messages, posts, and comment activity on the account, and report anything suspicious. If it affects other people, let them know. Finally, pause or temporarily deactivate the account, if that is an option, to make it even tougher for hackers to get access.
Rajendran Murthy is the J. Warren McClure Research Professor of Marketing at the Rochester Institute of Technology’s Saunders College of Business.
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When will Berkshire Hathaway stop selling Bank of America stock?
3 minBerkshire began liquidating its big stake in the banking company in mid-July—and has already unloaded about 15% of its interest. The selling has been fairly aggressive and has totaled about $6 billion. (Berkshire still holds 883 million shares, an 11.3% interest worth $35 billion based on its most recent filing on Aug. 30.)
The selling has prompted speculation about when CEO Warren Buffett, who oversees Berkshire’s $300 billion equity portfolio, will stop. The sales have depressed Bank of America stock, which has underperformed peers since Berkshire began its sell program. The stock closed down 0.9% Thursday at $40.14.
It’s possible that Berkshire will stop selling when the stake drops to 700 million shares. Taxes and history would be the reasons why.
Berkshire accumulated its Bank of America stake in two stages—and at vastly different prices. Berkshire’s initial stake came in 2017 , when it swapped $5 billion of Bank of America preferred stock for 700 million shares of common stock via warrants it received as part of the original preferred investment in 2011.
Berkshire got a sweet deal in that 2011 transaction. At the time, Bank of America was looking for a Buffett imprimatur—and the bank’s stock price was weak and under $10 a share.
Berkshire paid about $7 a share for that initial stake of 700 million common shares. The rest of the Berkshire stake, more than 300 million shares, was mostly purchased in 2018 at around $30 a share.
With Bank of America stock currently trading around $40, Berkshire faces a high tax burden from selling shares from the original stake of 700 million shares, given the low cost basis, and a much lighter tax hit from unloading the rest. Berkshire is subject to corporate taxes—an estimated 25% including local taxes—on gains on any sales of stock. The tax bite is stark.
Berkshire might own $2 to $3 a share in taxes on sales of high-cost stock and $8 a share on low-cost stock purchased for $7 a share.
New York tax expert Robert Willens says corporations, like individuals, can specify the particular lots when they sell stock with multiple cost levels.
“If stock is held in the custody of a broker, an adequate identification is made if the taxpayer specifies to the broker having custody of the stock the particular stock to be sold and, within a reasonable time thereafter, confirmation of such specification is set forth in a written document from the broker,” Willens told Barron’s in an email.
He assumes that Berkshire will identify the high-cost Bank of America stock for the recent sales to minimize its tax liability.
If sellers don’t specify, they generally are subject to “first in, first out,” or FIFO, accounting, meaning that the stock bought first would be subject to any tax on gains.
Buffett tends to be tax-averse—and that may prompt him to keep the original stake of 700 million shares. He could also mull any loyalty he may feel toward Bank of America CEO Brian Moynihan , whom Buffett has praised in the past.
Another reason for Berkshire to hold Bank of America is that it’s the company’s only big equity holding among traditional banks after selling shares of U.S. Bancorp , Bank of New York Mellon , JPMorgan Chase , and Wells Fargo in recent years.
Buffett, however, often eliminates stock holdings after he begins selling them down, as he did with the other bank stocks. Berkshire does retain a smaller stake of about $3 billion in Citigroup.
There could be a new filing on sales of Bank of America stock by Berkshire on Thursday evening. It has been three business days since the last one.
Berkshire must file within two business days of any sales of Bank of America stock since it owns more than 10%. The conglomerate will need to get its stake under about 777 million shares, about 100 million below the current level, before it can avoid the two-day filing rule.
It should be said that taxes haven’t deterred Buffett from selling over half of Berkshire’s stake in Apple this year—an estimated $85 billion or more of stock. Barron’s has estimated that Berkshire may owe $15 billion on the bulk of the sales that occurred in the second quarter.
Berkshire now holds 400 million shares of Apple and Barron’s has argued that Buffett may be finished reducing the Apple stake at that round number, which is the same number of shares that Berkshire has held in Coca-Cola for more than two decades.
Buffett may like round numbers—and 700 million could be just the right figure for Bank of America.
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