Most investors should be currently aware of the “phishing” scams that send fraudulent E-mails directing you to log onto your bank or brokerage firm to verify personal information. These fraudulent E-mails are made to look like official correspondence but direct people to fake sites that try to capture personal information such as account numbers, passwords, and Social Security numbers. Financial institutions don’t solicit this information from their customers and most people know better than to respond to E-mails with personal data. [For more on phishing see the September/October 2004 Computerized Investing Editor’s Outlook]
The latest identify theft risk is coming from “pharming” attacks that direct your movement to alternate Web sites. How does this happen? Whenever you browse the Internet by entering a Web address—such as www.aaii.com—into the address bar of your browser, you are actually directed to the site by looking up a numerical address on a DNS server (domain name server). DNS servers around the world tell your computer to go to 188.8.131.52 whenever you type in www.aaii.com. Without the DNS servers, your computer would need to know this numerical IP address.
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