Hackers took over $120 Million in three months : FDIC

Bangalore: Ongoing computer scams targeting small businesses cost U.S. companies $120 million in the third quarter of 2009, according to the U.S. Federal Deposit Insurance Corporation, reports The Telegraph.

Online banking fraud involving electronic transfer of funds has been on the rise since 2007 and rose to more than $120 million in the third quarter of 2009, as per estimates presented at the RSA Conference in San Francisco, by David Nelson, an examination specialist with the FDIC. The FDIC receives a variety of confidential reports from financial institutions, which allows it to generate the estimates.

"Almost all of the incidents reported to the FDIC related to malware on online banking customers' PCs," said Nelson. Typically a victim is tricked into visiting a malicious website or downloading a Trojan horse program that gives hackers access to their banking passwords. Money is then transferred out of the account using the Automated Clearing House (ACH) system that banks use to process payments between institutions.

Even though banks now force customers to use several forms of authentication, hackers continue to steal money. "Online banking customers are getting too reliant on authentication and on practicing layers of controls," Nelson said. "Commercial deposit accounts do not receive the reimbursement protection that consumer accounts have, so a lot of small businesses and nonprofits have suffered some relatively large losses. In the third quarter of 2009, small businesses suffered $25 million in losses due to online ACH and wire transfer fraud."

Also, small businesses often do not have the controls in place to prevent unauthorized ACH payments, even when their banks make them available, Nelson said. "Hackers are definitely targeting higher-balance accounts, and they're looking for small businesses where controls might not be very good."