Vanguard has hired RSA Security to protect investors' accounts online, The Wall Street Journal reports. Using systems similar to those at banks, the software looks for anomalies in customer activity. It also shows images to investors that they have selected beforehand to protect them against fraudulent websites aimed at stealing their personal information.

"What we're really trying to do is stay one step ahead of the bad guys," commented Tim Thornton, head of Vanguard's Web services. "We've done a lot of stuff to make sure that our systems are security, but this takes it a step farther."

Roy Weitz, publisher of fundalarm.com, hailed the move, saying few fund companies have taken the extra measure.

He noted that people monitor their bank accounts far more frequently than they look at their mutual funds, rendering them more far more likely to detect identify theft in a bank account. Undetected for a long period of time, a criminal would have an easier time of depleting an investor's mutual fund account.

The Federal Financial Institutions Examinations Council issued guidelines last year for banks to heighten their online security.

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