US discount brokerage Charles Schwab is introducing a fraud protection programme for all its customers and says it will reimburse all losses that arise from unauthorised account activity.
Schwab says the guarantee is effective immediately and covers all accounts in the organisation.
Brokerage accounts are not protected by the Federal Deposit Insurance Corporation or other banking regulations in the same way online bank accounts are, so customers that fall victim to fraud are not guaranteed recovery of losses.
In January E*Trade launched its own fraud protection programme for its online brokerage and banking customers and was thought to be the first brokerage to promise to reimburse losses for fraud victims.
Now Schwab has followed suit and introduced its own security guarantee programme. Commenting on the initiative, Charles Schwab, founder and CEO of the company, says: "Given rising public concerns over identity theft and cyber-fraud, we think adding a clear and simple guarantee will contribute to even greater peace of mind for our clients."
But Schwab maintains that while the guarantee provides a "safety net", customers do have a role to play in security protection and are expected to safeguard account access information and report any unauthorised transactions as quickly as possible.
However last year Charles Schwab was fined $1 million by the New York Stock Exchange for allegedly allowing rogue non-employee investment advisors to steal from its clients' accounts.