What Is Online Banking Fraud?
You can bet that thieves began finding ways to steal money from online bank accounts soon after the first few went into operation. The Comptroller of the Currency estimates that online banking fraud has become a billion dollar business. While there are many safeguards in place to thwart thieves from taking money from those accounts, the thieves are becoming much more sophisticated. Then, there are the banks, themselves, that fraudulently impose late fees or overcharge its customers.
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Typical Fraud
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Raiding one's online bank account requires that the perpetrator get access to it. The easiest way is to acquire the user name and password of the customer because, using that information, he can access the checking account and either transfer the balance to his account or withdraw funds from the account.
Information Gathering
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Watching the customer from a distance as he transacts business at an automated teller machine (ATM) is the time-honored way to get the customer's user name and password; however, as customers are more wary of fraud, thieves have become sophisticated. For example, a thief can look over the customer's shoulder from miles away using state-of-the-art surveillance equipment, or install devices on the ATM, itself, to gather that information without raising the customer's suspicions.
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Phishing and Pharming
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The bank's customer receives an email that he thinks is from his bank, asking him to provide information about his account. Unbeknown to the customer, it is actually from a thief, and if the customer responds with that information, it goes back to the thief who sent it, who in turn uses it to access that customer's account. This is called "phishing."
A modern-day version of this is called "pharming" in which the thief actually hijacks the domain name of the website. When you go to your bank's website, you'll actually be on the thief's website, instead. While there are lots of software programs that are great at detecting schemes like phishing and pharming, occasionally a thief's design foils even the best software available.
Spyware
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This can happen when you reply to the most innocuous email or open a link or attachment contained in the email. Your computer will be infected with a Trojan Horse or spyware, and whenever you access your bank account, it will note the user name and password and forward it to the thief. You are particularly vulnerable to this if you share a computer with others, like at the office or an Internet cafe. This method is also used to steal your identity.
To Prevent Fraud
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Keep your anti-virus and anti-spyware software current. If your computer doesn't have them, go to Mcafee.com or Symantec.com (see Resources) for further information. Also, you should have a firewall if your using a broadband connection. Finally, if your computer is on any version of Microsoft Windows, go to Microsoft.com for help in protecting your computer (see Resources).
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References
Resources
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