Pub. 1 2013 Issue 2

www.uba.org 16 Be Aware of Corporate Account Takeovers Article provided by ABA Insurance Services A BA Insurance Services continues to see an alarming increase in the num- ber and size of corporate account takeover claims. Banks are incurring significant losses after making business decisions to reimburse customers for funds lost due to fraudulent transactions. Many of the claims reported are in the high six-figure to low seven-figure range. Corporate Account Takeover occurs when thieves hijack your customer’s computer systems and gain access to on- line banking credentials, passwords and other confidential financial information. As large companies fortify their cyber security defenses, criminals are setting their sights on small businesses with less sophisticated procedures. Sadly, your small business customers have become the low-hanging fruit for cyber criminals from around the world. Criminals commonly gain access to your customer’s systems by targeting employees through phishing schemes, fraudulent emails purporting to be from your bank or other trusted business partners, or entities such as the local chamber of commerce. When these emails are opened, malware or key- stroke capture programs are launched on the affected computer. It is only a matter of time before fraudulent bank- ing transactions begin. What can your bank do to help prevent corporate account takeover? Community banks have become the frontline in the fight against electronic crime. Not only must you educate your employees about the financial implications of these schemes, it is also imperative to inform your customers about these threats and provide them with best practices to implement at their businesses. Your retail banking employees offer the best opportunity to prevent financial loss before it occurs. They must understand how these crimes are occurring and how they can be stopped. Discuss corporate account takeover at staff meetings. Report successes to all employees and reward those employees who uncover and prevent fraud. Always encourage your staff to question unusual activity and trust their gut feelings. Managers should ensure that all employ- ees are strictly following your bank’s security and verification procedures. Check and double check signature cards and account agreements. Be on the lookout for small discrepancies between the information received from purported customers and what you have on file. For instance, a wire transfer request that contains the correct account holder’s name and contact information, but is received via email from instead of Every single banking transaction should be put through the “common sense test.” Is a small mom-and-pop business that has never wired money before suddenly attempting to wire a large sum of mon- ey? Is a business that serves your local community requesting an international wire? Is a business that always conducts transactions in person suddenly transfer- ring money electronically? It is also imperative to educate your cus- tomers about safeguarding their systems. Despite the prevalence of this type of fraud, many small businesses are unaware of their vulnerability, and a significant number do not provide any internet safety training to their employ- ees. To help with these conversations, the American Bankers Association recently published “The Small Business Guide to Corporate Account Takeover.” You can access this guide and other information under “Solutions” > “Fraud / Security” at www.aba.com . You can also refer your customers to the Federal Communication Commission’s Cybersecurity HUB at www.fcc.gov/ cyberforsmallbiz. The HUB contains free training materials, security guides and other useful information for small businesses. We suggest you make this information available to your customers through your standard marketing chan- nels including newsletters, social media and statement inserts. About ABA Insurance Services. UBA-endorsed, ABA Insurance Services is the market’s onlybank-ownedandbankerdirectedprogramforD&O, bond and now, P&C related insurance. Recognized for underwriting and claims handling expertise, the insurance program dates back 26 years. For the 23rd consecutive year, a distribution has been declared from the program’s reinsurer, totaling $77.9 Million to date. For more information, visit www.abais.com or contact Rich Flenner at 800-274-5222 or rflenner@abais.com . Connect with us on Twitter @ABAInsSvcs.