As more of our personal data is stored online across various sites and platforms, it’s important to stay vigilant and to protect ourselves digitally.
But what happens when a site we trust and use regularly gets hacked which puts our private and personal data in harm’s way. For online brokerages like Robinhood, where we enter our personal and banking information, one would think that the site’s security would be taken very seriously.
Even though Robinhood’s user’s data is encrypted and usually kept very secure, the investing platform has been the victim of three major hacks over the past couple of years. These hacks occurred in July of 2019, October of 2020, and in November of 2021.
Obviously these hacks are not the first time Robinhood has seen negative headlines, as the company has been criticized for practices like payment for order flow and for providing too much leverage to new investors.
While security breaches and site hacks have become a regular hazard for online businesses, the site has only been operational for eight years (as of 2022) and has already had three major data breaches and few other smaller ones under its belt.
Has Robinhood Ever Been Hacked Before?
Unfortunately for its loyal users, Robinhood has been hacked on several different occasions. As mentioned earlier, Robinhood has only been in business since 2013, but has really only picked up mainstream appeal over the last couple of years. Robinhood gained notoriety during the GameStop meme short squeeze that happened in early 2021, and for a time the platform had fallen out of favor with retail investors.
Given its history with being hacked, it may be surprising to some that so many investors still use the platform for stock trading. But to its credit, Robinhood has done an excellent job of simplifying investing and bringing its mobile-based platform to younger generations. At the same time though, it is unfortunate that these security breaches have happened as it could give younger investors a negative association with brokerages in general.
Related Financial Geek Article: 10 Downsides of Investing with Robinhood You Might Not Know About
Okay, so now let’s talk more about these these security breaches and hacks that Robinhood and its user have fell victim to.
1. Password Breach – July, 2019
Oh back in simpler times when security hacks weren’t as serious for Robinhood.
To be fair though, this was never actually confirmed as being a site hack, but Robinhood did take the time to notify users that their passwords had been stored in plain text on the platform. The usual practice for sites, especially those that hold personal and financial data of its users, is to encrypt passwords so that if the site is ever attacked, hackers cannot walk away with every user’s login details.
Back in 2019, Robinhood had less than six million users and never revealed how many of them were affected. To date, this security breach has not directly affected any of its users or their account balances. It was likely a security oversight by Robinhood that was quickly realized and fixed before anything could ever happen.
2. User Accounts Hacked – October, 2020
Just over a year later, Robinhood was hacked again although the actual service and site were not breached. Robinhood did confirm that 2,000 user accounts were hacked as cyber criminals utilized user emails to infiltrate their accounts. In a bitter twist of irony, the attack happened just as National Cybersecurity Awareness Month was kicking off.
Users that were affected reported that their accounts had been depleted by the hackers. The amounts were siphoned but not completely drained, so the attack actually could have been much more widespread than first reported. Still, this is nothing compared to Robinhood’s biggest security breach which took place thirteen months after this one.
3. Data of 5 Million Customers Taken – November, 2021
This was the big one for Robinhood and likely the one that was fresh in the headlines for most of us. In November of 2021, over 5 million Robinhood users had their personal data hacked, with 2 million users getting their names taken. Robinhood released a statement that only 10 users had ‘more extensive account details revealed’ in the hack.
Robinhood gained millions of users during the pandemic as a younger generation of investors downloaded its mobile app. The site stated that this particular hack utilized a customer service representative for Robinhood to gain access to the site’s customer support system. The hacker also attempted to extort Robinhood for money following the hack, but it seems as though Robinhood did not give into the demands.
How to Prevent Your Robinhood Account from Being Hacked
The truth is, no matter how careful you are online, sites can realistically be hacked at any moment. And as disheartening as that sounds, there are some authentication methods that you can use to help protect your Robinhood account.
For one, Robinhood has advised users to take advantage of its multi-factor authentication system when logging in. Multi-factor authentication adds another layer to logging into online sites by requesting further evidence of a user’s identity. This can be done by providing a passcode, a pin, user details, or a code received by SMS or email. Users can also utilize built-in security features on their mobile phone which include fingerprint authentication or facial scans.
With all of this said, Robinhood is a safe platform to invest your money with.
As just mentioned, anytime you give out your personal and financial data to a company online, there is always a risk of hacking. So make sure you take the necessary precautions to minimize the chances of this happening and then carry on.
And while Robinhood is an overall safe platform to invest in, as I talk about it my article here, you can still lose money if you don’t invest responsibly.
So invest wisely and feel good about about doing it with Robinhood!
Thanks for ready folks, I really hope this article provided you with the information you were looking for.