Banks Blocking More Fraudulent Money Transfers From Hijacked Business Accounts

Today's Best Tech Deals

Picked by PCWorld's Editors

Top Deals On Great Products

Picked by Techconnect's Editors

Cybercriminals increasingly are targeting business bank accounts to set up fake money transfers. But the good news is, banks seem to be getting better at stopping some fraudulent transactions before stolen funds leave the institution.

BANKING'S BIG DILEMMA: How to stop cyberheists via customer PCs

The Financial Services Information Sharing and Analysis Center (FS-ISAC) polled 77 financial institutions and asked how many account takeovers occurred in 2009 and during the first six months of 2010. The FS-ISAC consists of a group of banks that shares threat information and interacts with the federal government on critical infrastructure issues. Its members include Citi, Prudential, Bank of America, JPMorgan Chase, Goldman Sachs and Wells Fargo, among others.

Through its poll, the results of which were released today, FS-ISAC learned that 21 institutions reported a total of 108 commercial account takeovers during the first 6 months of 2010, compared to 86 for the full year of 2009.

In 36% of the account takeovers that occurred in first half of 2010, while fraudsters did manage to initiate a monetary transaction, the banks were successful in stopping the funds transfer before it left the institution. In all of 2009, there was only a 20% reported rate of stopping fraudulent funds transfer attempts.

The study did not detail what methods were used to block fake funds requests. Nor did the FS-ISAC survey detail attack methods used by cybercriminals. However, it's become well-known that cybercriminals use malware such as ZeuS to compromise computers used by business employees for electronic funds transfers. Banks consider dangerous malware designed to speed fraudulent funds transfer to cybercriminals to be among their biggest worries when it comes to account takeovers.

Although banks may be getting better at blocking fake funds transfers from compromised commercial accounts, the transfers still are happening at a discouraging rate.

In 27% of the account takeovers in the first half of 2010, monetary transactions were created and funds were fraudulently transferred out of the financial institution. In 2009, 63% of account takeovers ended in fraudulent transfers. FS-ISAC said it intends to soon conduct another survey to complete its look at what happened in 2010, and also plans a study on 2011.

As far as the amount of money considered lost because of the commercial account takeovers, the total exposure was $15.7 million in 2009, while the first half of 2010 is being tabbed at $10.44 million, according to the survey's findings.

While the study by FS-ISAC is not representative of the entire U.S. banking industry, it presents a strong indicator of the scale of the cybercrime threat, which presents particular problems for businesses because banks are not compelled by law to restore funds transferred fraudulently from business accounts.

Read more about wide area network in Network World's Wide Area Network section.

This story, "Banks Blocking More Fraudulent Money Transfers From Hijacked Business Accounts" was originally published by Network World.

Note: When you purchase something after clicking links in our articles, we may earn a small commission. Read our affiliate link policy for more details.
Shop Tech Products at Amazon