A hacker anywhere in the world could easily track the whereabouts and file-sharing habits of a Skype user and use the information for purposes of stalking, blackmail or fraud.
What fraud and security issues does Paul Smocer, the new president of BITS, see as being top concerns in the coming year? Mobile payments, social media, and a strong need for institutions and organizations to comply with existing guidance top the list.
Fraud is winning in the fight against cybercrime. Why? Because financial institutions continue to rely on ineffective technology and controls, says fraud analyst Tom Wills says.
"Everyone knows it is happening, but no one is capable of stopping the proliferation of these cyberattacks," says Jim Payne of Choice Escrow and Land Title LLC, a victim of corporate account takeover.
Account takeovers are up, but losses are down. Doug Johnson of the ABA says that's because banks and their customers are catching and blocking suspect ACH transactions before they drains corporate accounts.
Nessa Feddis of the ABA says increased investments in technology at the bank and consumer levels have fueled confidence in online banking. "I think the reason you see an uptick in use here is because the channel is more secure."
"What banks need to be aware of is that much of this fraud is occurring on the consumer and business-customer side, and not all of them will invest in technology that catches these attacks," says Phil Blank of Javelin Strategy & Research.
The bright spot is that 36 percent of the takeover incidents reported in 2010 were stopped before fraudulent funds transfers were approved. That's an improvement from 2009, when only 20 percent were thwarted.
Banks and commercial customers are more often working together, enabling them to catch and stop fraudulent requests for funds transfers before commercial accounts are drained.
Small businesses have room to improve when it comes to fraud prevention. And according to a recent study commissioned by TD Bank, a lack of understanding and apathy are challenges that need to be overcome.
"We face a broad threat ... and each consumer has to understand that their part in protecting both their own finances and the financial infrastructure, together, is a very large part," says Ian Harper, Pentagon Federal Credit Union.
A new twist in the ongoing online security battle between banks and their commercial customers was reported this week after a corporate account in Omaha, Neb., was hit with thousands in fraudulent ACH transactions.
This $38 billion bank has invested a great deal of time and effort into its online security program, continuously conducting risk assessments and making strides to ensure commercial customers stay informed about evolving online-banking risks.
A U.S. District Court in Maine has affirmed a magistrate's May recommendation to deny a motion for a jury trial filed in the ACH-related fraud case between PATCO Construction Inc. and Ocean Bank.
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