Wiped out

This post is a response to Saving Ninja’s 4th Thought Experiment (you can find the others here). @SavingNinja poses this thought experiment asking for a ‘stream of consciousness’ response:

You wake up one rainy morning and after checking on your accounts you find out that you’ve been ‘wiped-out’ by a cybercriminal. You’ve lost all of the money and assets that you’ve ever owned and you can’t get them back. What will you do?

Scary biscuits

What a nightmare scenario! Saving Ninja certainly likes to post pretty dark thought experiments (here’s a response to a previous one, you’ve got 10 years left to live).

The good thing is that I wouldn’t lose too many of my ‘assets’.

God bless regulations

Firstly, I don’t think it’s physically possible to ‘lose’ my house. I still have the title and I haven’t physically signed anything. So it seems reasonable to say I’ve still got my home.

Second, my pension might have been cleaned out. But only through a transfer (or something illegal). In the former, I can cancel any transfer within 30 days due to FCA cooling off regs. So that’s my pension saved. With the later, I might be in line for some whopping compensation from my pension providers.

Similarly, I can cancel any ISA transfer within 14 days. So if any transfer can be cancelled. I’d be notified of any attempts to sell assets or withdraw cash to my bank account. A quick call to my brokers would stop all that. Again, a change to the nominated bank account would be flagged. So I would spot it before my ISA got emptied.

All this left me with a great appreciation of all the regulations we have in the UK. In short, even if things went really bad, there are lots of checks and controls which would make it more of a painful inconvenience than a ‘start from scratch’ type affair.

That said

I’d assume my bank accounts would be cleaned out and my credit cards maxed out. Thankfully, I don’t have too high credit limits. So we’ve got some semblance of damage control.

Again, the regs are a big boon. I’d likely get all my money back eventually. (And given I got ‘locked out’ of one of my accounts the other week for trying to buy some flights, I assume it would be pretty tough to clean me out).

I also have one ‘dumb’ credit card that I’ve never used online. Unless they physically stole the credit card I don’t see how they could get to that one. So that leaves me with a bit of money to cover the essentials.

Short-term pain

It’d leave me needing to cover my cash deficit in the short-term. So I’d have to sweat my assets a bit:

  • My house asset: Rent out the spare bedrooms in my house via Airbnb or Gumtree. That’d be some nice tax-free cash given Rent A Room Relief. I could potentially get a ‘quick’ remortgage to get at some of the equity in the house (potentially within 4 weeks).
  • My brain asset: I can sell some of my time to people. I could do some accountancy or financial planning work.
  • My network asset: I have lots of lovely friends and family and I’m sure they wouldn’t mind lending me some cash to tide me over in the short-term. This actually happened to me once before where my bank shut down my account due to suspected fraud. I couldn’t get any money out for a week. My friends lent me some cash. And I learnt my lesson not to go with one bank. I quickly opened a second bank account.
  • My wife asset: Definitely the most valuable thing I own (I’m joking…) My wife earns a pretty decent wedge, so once we’ve reached pay-day, we’d likely be ok. Perhaps more importantly, she’d be huge emotional support for me.
  • Guinea Pig assets… I could even get my guinea pigs working to make me some sweet cash.

Feels a bit like cheating

Once I got to the end of my ‘plan’, I felt like I cheated a bit. I haven’t ‘lost’ very much. That’s despite Saving Ninja saying I had lost everything. But thinking about it, I look at my biggest assets and those aren’t vulnerable to a cyberhacker (house, brain, network and, of course, Mrs YFG). But they are of course vulnerable to other things (I think mainly me being a d*ck).

That’s why financial protection is so important. Between diversification, insurance, regulations and being a decent person(?) this particular scenario can be mitigated to a great extent.

That said, I feel immensely grateful as a lot of people don’t have these assets. They aren’t married. They don’t own their home. They might have no qualifications or skills. They might have no family or friends, or any family and friends with the ability to help them.

So despite being a gloomy scenario to begin with, I’ve finished feeling quite sanguine. I’m a very fortunate man indeed.

All the best,

Mr YFG

Links to other responses:

CaveMan @ DitchTheCave

QuietlySaving

in-deed-a-bly

Marc @ FinanceYourFire

Merely curious

FIRE v London

Gentleman’s Family Finances

 

12 thoughts on “Wiped out

  1. Great post, YFG. Thanks.

    While I had sort of assumed in my post (https://firevlondon.com/2019/02/15/ive-lost-everything-through-a-cyber-theft/) that my pension(s) wouldn’t be easily raided, I didn’t know your point about ISA transfers having a 14 day cooling off period. If that protects my ISAs I would feel a lot happier – though whether I could keep my Big Hairy Audacious Goal (https://firevlondon.com/2015/06/15/my-100m-tax-free-account/) would be very doubtful.

    You are absolutely right that at some level the UK regulations would almost certainly help us recover/undo/be compensated for losses. One to be thankful for.

    1. Hi FvL. Thanks! I’ll confess I read your post before writing mine. It was through your post I realised Saving Ninja was running another thought experiment. When I saw the title of your post I thought: “uh oh”.

  2. Very helpful and well researched post Mr YFG.

    On the property front it is worth signing up for land registry alerts service, so that if anything to do with the title of your property changes you are immediately notified. It is free. Won’t stop the theft, but means you can get onto the property fraud line almost immediately to (hopefully) rescue the situation.

  3. Haha, I have got a couple of happy ones lined up next 🙂

    I think your post articulates perfectly how well protected we are in the modern day. It’s not like in ancient Babylon where some thug could come and rob your bag of gold which you’d been building for years. We’re very fortunate indeed.

    If a hacker ever does rob all that I own, you’ll be the first that I ring as you’ll be able to tell me what to do!

    Thanks for contributing, a happy one next – I promise.

    1. Don’t even have to go back to Babylon. My nan (from overseas) would talk about gold being valuable as nobody could steal it from you. She’d wear half a jewellery store. Good luck getting it from her (she was proficient with knives).

  4. Good dose of rationality in there. Whereas many of the rest of us would panic I love that you would methodically step through what you could to minimise any impact.

    I’m very much with you on the gratitude side. The networks of family and friends that I could fall back on, as well as my own skills mean that even if the worst happened the impact would end up being limited. It reminds me that networks aren’t just for people who have the right school tie, they’re for everyone.

  5. We take the following precautions.

    (i) We deal with ns&i only by post.
    (ii) We have two BS accounts that we run only by landline phone.
    (iii) We have two more that we run entirely by passbook.
    (iv) We have three credit cards, only one of which is ever used online (and only by computer).
    (v) We have a current account that is almost impossible to use, even by us.
    (vi) We have another that we run only by landline phone.
    (vii) Our online current accounts and savings accounts are run strictly from home, by computer.

    Actually, (v) is such a bloody nuisance that we plan to switch it.

    If I could think of a good way to store it securely we’d have a little cache of gold sovs, and second hand gold and silver jewellery.

    I sold my rifle and ammunition decades ago: perhaps that was unwise.

  6. Another precaution: don’t transfer a DB pension to DC.

    How about computers? I saw someone suggest that all O/L financial activity should be performed on a dedicated computer used for no other activity. What else, since I don’t know much about this? Plug the computer into your fibre box rather than use wi-fi? Use a Mac rather than a PC? To clear an old computer for this use, do what? Delete all bookmarks, delete all cookies, dump all software not required for financial stuff? Delete links between that computer and any others you might own? Anything else? Presumably clear all financial stuff of other computers and smartphones?

  7. Haha, trust you to point out that regulations will save the day, so that it’s not all doom and gloom! Very comforting to say the least though that I’m in a country which has these regulations in place.

    However, I didn’t my credit cards being maxed out and that would be a nightmare as I still have very high credit limits.

  8. Such a brilliantly logical response. I just decided to run with the semi-apocalyptic scenario. I am so very grateful for all our protections. Someone cloned/used my credit card the other day to spend £100ish in Argos. Nothing else, just that. Was so reassuring how quickly and easily the card company credited it. Although I imagine there would be a bit more of an investigation if the card had been maxed out.

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