Sister CISA CISSP

Aug 28 2009   2:02PM GMT

Small Business is Being Targeted



Posted by: Arian Eigen Heald
Tags:
ACH Fraud
Banking Fraud
Data Breaches
data security

The days when you could assume that because your company was so small hackers wouldn’t care, have officially gone past. Security by obscurity has passed as well. Now the thieves are looking for small businesses so they can get to the banking accounts and wire money.

I was called on one of these last spring, and it worked like this: the controller got a call from the bank (someone was watching! Yay!) about some wired fund transfers that looked suspicious. After reviewing them, the controller realized fraud and theft had occurred. Other evidence was that the thief had changed the email address back to the controller so that she/he would receive no notification of the wire transfers. It seemed pretty clear that someone had somehow gotten her/his access to the bank account. That was all that could be discovered at the time. They lost over $40,000. That’s small change compared to some of the fraud going on.

Reading an article from the Washington Post, I recognized the scam. It works like this:

“In many cases, the scammers infiltrate companies in a similar fashion: They send a targeted e-mail to the company’s controller or treasurer, a message that contains either a virus-laden attachment or a link that — when opened — surreptitiously installs malicious software designed to steal passwords. Armed with those credentials, the crooks then initiate a series of wire transfers, usually in increments of less than $10,000 to avoid banks’ anti-money-laundering reporting requirements.”

Sounds like exactly what happened to my client. The bad news is that once that money is wired out, there is no way the company can get it back. Losses to small businesses are becoming significant, but have not gotten much press up until this point.

In fact, wire-transfer fraud has gone up 58% in 2008, according to the US Treasury Department. Commercial business customers only have about two days to notify the bank of fraud, and then they eat the loss.

The problem is, Anti-Virus software is not keeping up with malware coming from over the Internet. Thieves are able to use malware to capture even the one-time codes on a fob during a transaction.

An advisory issued by the Financial Services Information Sharing and Analysis Center, recommends that commercial banking customers take some fairly rigorous steps to secure their online banking accounts. For example, the group recommends that commercial banking customers “carry out all online banking activity from a standalone, hardened, and locked-down computer from which e-mail and Web browsing is not possible.”

Another option might be VMware, where an image could be loaded for banking use only.

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