A friend of mine, Bill, found out that his password had been mailed to him in plaintext from his ’shiny, new 401k’ and he wrote about the disconcerting experience of a financial services company being careless with security. Having worked in a financial services company, I can only say that the troubles he encountered are not that bad… you should have seen some of the sausage in the factory I worked in.
That said, Bill violated a crucial rule of security and he needs to learn it as much as the Schwab folks need to learn their own lessons:
Never, never, never depend on someone else to provide your security.
Bill “used one of his common passwords”… and you shouldn’t have any of those. A common password is a common vulnerability, especially because you can’t know how companies will protect your passwords or your data — as he unfortunately learned. To avoid this, you can use a desktop application (such as the free Password Safe, originating from Bruce Schneier’s Counterpane Labs) or a browser plug-in (such as Password Hasher or Secure Login or any of the other 48 listed on the addons site) or the Mac’s built-in Keychain app so you can generate random passwords and never, never reuse them. Personally, I’ve been using Password Safe for years.
He also offers great tips for websites to make their applications more secure, like not asking for really constant, common, data like mother’s maiden name. The other option is to not answer with an expected response. Mother’s maiden name? Istanbul. Honeymoon location? Jones. And so on…
Never trust someone else’s security.
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