Hackers steal $1 billion a year from midsize banks, but account holders lose

Image by Imamon via Flickr

Organized criminal gangs, operating mostly out of Eastern Europe, are hacking the bank accounts of small companies, school districts and local governments that maintain fat commercial bank accounts protected by rudimentary security measures at community or regional banks.
In increments of a few thousand dollars to a few million per theft, cybercrooks are stealing as much as $1 billion a year from small and midsize bank accounts in the U.S. and Europe, according to Don Jackson, a security expert at Dell SecureWorks. And account holders are the big losers.
"I think they're losing more now than to the James Gang and Bonnie and Clyde and the rest of the famous gangs combined," said Sen. Sheldon Whitehouse, D-R.I., who headed a Select Committee on Intelligence task force on U.S. cybersecurity in 2010.
The accounts typically aren't covered by insurance as individual accounts are.
"If everyone knew their money was at risk in small and medium-sized banks, they would move their accounts to JPMorgan Chase," said James Woodhill, a venture capitalist who is leading an effort to get smaller banks to upgrade anti-fraud security for their online banking programs.
JPMorgan Chase & Co., the second-largest U.S. bank, is the only major U.S. bank that insures commercial deposits against the type of hacking that plagues smaller banks, Woodhill said.
Via Google News