moneyreallymatters.com

Recently I read an article in Business week about hackers targeting small business bank accounts and stealing thousands of dollars from their online accounts. As per stats, Cybercriminals steal $1 billion a year from commercial accounts at banks, which often hold companies responsible for losses. It has become big concern for both banks and businesses.

Hacking has been real trouble since the starting of internet era. Virus, Spamwares, Spywares and all sorts of malwares floated around internet to either destroy somebody’s work or steal someone’s private information so they can make money out by selling it until past few years. Now hackers have gone for bigger bucks by hacking into personal and business online bank accounts and sucking the money in thousands.

What is the FDIC and Fraud Insurance?
Many people confuse with FDIC Insurance and assume FDIC will cover for all bank loses. That’s totally not true. FDIC insurance will only cover loses when the bank you have an account with goes belly up. It doesn’t cover a single penny when it comes to online fraud except personal bank accounts which are covered by Banks fraud insurance.

Is my business account covered?
No, Business accounts are not covered under fraud insurance. But banks promise to work with you and try to get the money back. If you are lucky, you will either get whole many back or part of it. If you only get part of it, banks either will wash their hands and say that’s all we can get and rest is gone or sometimes compensate the part depending upon banks policy.

That’s what happened few customers when their accounts were hacked and going to court doesn’t really help. As per Business week story, one business was Patco Construction. A 22-employee builder in Sanford, ME., lost $354,444 in 2009 after cyberthieves hacked its accounts. When the bank, now named People’s United Bank (PBCT), rebuffed his attempts to reach a settlement, he sued. He argued the bank should have better monitored his account. Federal judges have twice agreed with the People’s United contention that its protections were “commercially reasonable.” Patterson plans a further appeal.

Last year Senator Charles E. Schumer (D-N.Y.) introduced a bill to make banks extend cyberfraud protection, already required for individual depositors, to small business clients. I don’t think that gone anywhere.

The American Bankers Assn. says businesses might get lax about security if they knew fraud losses would be covered. “The goal is to … have a partnership between a business and a bank and recognize that every one of those partners has a responsibility to secure the environment,” says Doug Johnson, senior policy analyst for the ABA. “If you put in a provision that takes away any responsibility, it gives the commercial customer no motivation to be active partners with the bank.”

What can businesses do?
If you are small business owner, try to protect your computer with up-todate security softwares and keep up with them. Make sure only give access to onlines to certain people who will be careful about protecting them properly. Many online Banks like INGDIRECT provides security softwares to protect your computer so you can avoid becoming a victim of cyberfraud. Talk to you bank and see whether they want you to implement any special softwares to comply to their rules so they can cover you if anything goes wrong.

You can only do so much when it comes to online hacking, after that you can only pray and hope, these hackers won’t get to your computer.