This is my understanding of this issue. Fraudulent withdrawals from a brokerage account can occur using what is referred to as the Automated Customer Account Transfer Service (ACATS). ACATS is the system used brokerage B pulls funds from brokerage A. A scammer might be able to do a fraudulent withdrawal if they have with your basic information including social security number and your brokerage account number. The individual first opens an account at another brokerage and then initiates the request for that brokerage to pull your funds from your brokerage. Vanguard, Fidelity and Schwab all have mechanisms for an account holder to block ACATS system transfers and then unblock if/when they wish to do a transfer.
Does anyone have additional information on this topic? I am planning to put in a block for my Vanguard accounts.
You can block Fidelity accounts from ACATS transfers. It’s called “lockdown”. Schwab no, but they have a security guarantee, “You will be required to identify items of unauthorized activity and may be required to complete a notarized affidavit of fraud.”
But if you voluntarily shared your account info using an aggregator, you are on your own. Stay away from those, those are honeypots of fraud.
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Correction of my earlier post. Vanguard does not have a mechanism to specifically block ACATS transfers. I do have text and email alerts for transfers and transactions to monitor my account activity so I can alert Vanguard if unauthorized activity occurs.