As technology advances so do emerging risks. LBW’s Tech Secure® division warns you to be extra careful when it comes to protecting and transferring money. Threats from computer viruses, online bank fraud, and business email compromise continue to cost organizations billions in losses across the globe. FBI Warns of Dramatic Increase in Business E-Mail Scams These monetary losses can jeopardize the long term success of any company or nonprofit organization.
With the proliferation of cybercrime, banks are under increased pressure to maintain commercially reasonable security and protect their assets and client assets from loss; but banks have no control over the security or controls at customer organizations. You have a responsibility to protect your own organization if your online bank credentials get stolen, your computer gets infected leading to a fraudulent transfer of money or securities, or an employee gets deceived into releasing funds to a cyber-criminal.
FDIC - Doesn’t the FDIC Cover This?
From the FDIC's website:
“The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
When a Bank Fails: “A bank failure is the closing of a bank by a federal or state banking regulatory agency, generally resulting from a bank's inability to meet its obligations to depositors and others. In the unlikely event of a bank failure, the FDIC acts quickly to ensure depositors get prompt access to their insured deposits.”
Why It's Not Covered “…by law, deposit insurance only protects accounts if your insured banking institution fails. FDIC deposit insurance does not protect accounts from a fraud or theft online (or otherwise). However, other laws and industry practices may provide coverage from cyber theft.”
Financial Institution - My Bank Is Going to Cover My Losses, Right?
According to the FDIC, “Unauthorized access to your funds may be covered by the Electronic Funds Transfer Act and other consumer protections. If a third party somehow gains access to your account and transacts business you did not authorize, you must contact the bank as soon as you notice the loss to learn about their procedures for protecting your rights.” We have underlined consumer protections because business customers may not fall under these protections. The bank usually is not liable for monetary losses on business accounts from a failure of the customer’s security leading to theft or deception. That leaves you, the business banking customer, potentially responsible for losses when it comes to cybercrime. Even consumers can be devastated to find out that they may be responsible for falling victim for scams and fraud.
My Money - What Are Some Examples of Cyber Crime?
Example: A vendor realized that its best customer’s payment was well overdue. An investigation determined that the vendor’s email had been hacked, and an imposter had been socially engineering the client into believing that a change in bank information was authentic. In the end, the fraudster finagled almost $100,000 through this scheme.
Example: A California escrow firm’s computer system was hacked in December 2012 and January 2013. Through the hack, cybercriminals were able to wire three payments, totaling $1.5 million, to accounts in China and Russia. Only $432,215 was recovered, and the escrow company went out of business.
Example: A fax requesting a wire was sent to a bank. The bank verified the customer’s request by phone. Unfortunately, the customer’s VoIP phone had been hacked and a cyber-criminal pretending to be the customer authorized the transaction resulting in a $719,000 loss. The funds were never recovered.
How Do I Educate Myself So I Do Not Become a Victim of Cyber Crime?
- See our cybercrime resource page
Being heads up and proactive can keep your organization, and its funds, safe. Here are a few quick tips to spot “phishing” e-mail messages in your inbox. Visit TechRepublic for an expanded description of each of these tips.
- The message contains a mismatched URL
- URLs contain a misleading domain name
- The message contains poor spelling and grammar
- The message asks for personal information
- The offer seems too good to be true
- You didn't initiate the action
- You're asked to send money to cover expenses
- The message makes unrealistic threats
- The message appears to be from a government agency
- Something just doesn't look right
FAQs
For amounts less than Rs 50,000, banks can refund the money without a court order if deemed fraudulent, based on internal policies and Indian Banks' Association guidelines. People cheated by cyber cons have other options to reclaim their money.
Do banks protect your money from hackers? ›
Banks secure your transactions and personal information online using encryption software that converts the information into code that only your bank can read.
Do banks insure your money if stolen? ›
Deposit insurance coverage protects depositors against the failure of an insured bank; it does not protect against losses due to theft or fraud, which are addressed by other laws.
What cybercrime is one of the most financially damaging online crimes? ›
Business email compromise (BEC) is one of the most financially damaging online crimes. It exploits the fact that so most of us rely on email to conduct both our personal and professional business.
How do I recover my scammed money? ›
Contact Your Bank or Payment Provider: Notify them immediately about the scam. If you used a credit card, they may be able to reverse the charge. Report the Scam: File a report with local law enforcement, consumer protection agencies, and financial authorities to alert them.
Can I get my money back after being scammed? ›
If you sent money to scammers via a payment app
Upon receiving your report, the bank can initiate a dispute with the payment app provider to reverse the payment and launch an investigation to determine the type of fraud and its perpetrators.
Where is the safest place to put money if banks collapse? ›
U.S. government securities—such as Treasury notes, bills, and bonds—have historically been considered extremely safe because the U.S. government guarantees timely payment of interest and principal, backed by its full faith and credit.
What bank is the most secure from hackers? ›
Bank of America is just one place below JPMorgan Chase on both the 2023 G-SIBs list and the Federal Reserve's list of the largest U.S. banks, which is why it was chosen in our research as one of the safest banks. The bank's security features also helped it score highly.
What is the safest place to keep cash? ›
Here are some low-risk options.
- Checking accounts. If you put your savings in a checking account, you'll be able to get to it easily. ...
- Savings accounts. ...
- Money market accounts. ...
- Certificates of deposit. ...
- Fixed rate annuities. ...
- Series I and EE savings bonds. ...
- Treasury securities. ...
- Municipal bonds.
There is no limit to keeping money in a savings account. You can deposit as much money as you want in it. But, if the amount deposited in your account comes under the purview of income tax, then you will have to give official information about it.
The FDIC insures up to $250,000 per account holder, insured bank and ownership category in the event of bank failure. If you have more than $250,000 in the bank, or you're approaching that amount, you may want to structure your accounts to make sure your funds are covered.
Who is responsible if your bank account is hacked? ›
The Electronic Fund Transfer Act provides important protections when consumers suffer unauthorized withdrawals from their accounts. For instance, so long as a person promptly notifies their bank that access to their account has been stolen, the law limits the person's losses to $50.
Who is the most victim of cybercrime? ›
Number of cyber crime victims in the United States in 2023, by age group
| Characteristic | Number of victims |
|---|
| 30-39 years | 88,138 |
| 40-49 years | 84,052 |
| 50-59 years | 65,924 |
| 60 years and older | 104,068 |
2 more rowsApr 3, 2024
Cyber attacks are financially devastating and disrupting and upsetting to people and businesses.
What is the most investigated cybercrime? ›
Most reported cybercrime in the U.S. 2023, by number of individuals affected. In 2023, the most common type of cyber crime reported to the United States internet Crime Complaint Center was phishing and spoofing, affecting approximately 298 thousand individuals.
Can you claim back scammed money? ›
Banks often refund scammed money, but it's not guaranteed. The likelihood of a refund depends on your bank's policies, the type of scam, the payment method used, and how quickly you report the fraud. To increase your chances of recovering your money, take these steps.
Does cyber insurance cover stolen money? ›
Our coverage helps to reimburse you for financial loss due to fraud, whether it's committed online or off. Examples include social engineering, unauthorized wire transfer or payment, forgery or alteration of checks, acceptance of counterfeit money, identity fraud and theft of cryptocurrency.
Can you get money back that was stolen? ›
The bank/credit union will put your money back into your account after they receive a signed affidavit certifying that the charges in question were not made by you. Return the affidavit through certified mail/return receipt requested so that you have proof of when and that it was delivered.
How can I recover my lost money? ›
If you realise or suspect you've authorised a transfer from your account to one belonging to a fraudster, contact your bank immediately. Tell them what bank account number the money was sent to and they will try to recover the funds. In many cases your bank will reimburse you.
