Online Banking Passwords Fraud Alert

Posted by Staff on February 6th, 2010 at 08:32pm Comments

According to research conducted by UK based company Trusteer among 4 million online banking customers, the majority of those that use online banks or online banking services re-use their passwords on different sites thus creating a perfect storm online banking password fraud opportunity for hackers and international crime syndicates (or maybe terrorists) that operate online.

The simple fact is that these days a lot of online financial -and not only- services allow you to login with your e-mail address as the login name. Examples of therefore are Paypal and Western Union, along with many banks.

And according to the research some 73% of respondents admitted re-using the same password in different online banking institutions, while even more alarmingly, 47% of all those surveyed said that they use the same password on different sites not linked directly to online banking (for example Facebook, Myspace, YouTube, Google, MSN, Wordpress, Blogger, etc…).

This creates a huge opportunity for online fraudsters and hackers that these days target non-banking related sites in hopes of getting the e-mail addresses and passwords from hijacked user databases. And the scary part is that these databases are available on open market at underground hackers’ Internet sites where hackers sell their latest “accomplishments” to whoever wishes to pay for them.

The next part of the scam is very easy – after hacking a smaller site, online hackers and scammers use the obtained login names/e-mail addresses and passwords to try and login into the most popular online financial institutions (anything from Paypal to particular banks). This does not take them long, the risk to be detected is minimal, the payout can be huge depending on the case (they’ll fully take over your online banking account!), and the aforementioned statistics are in their favour to hit the jackpot sooner or later.

Once these fraudsters gain access to your online banking account, they’ll try to move funds out of it, put unauthorized charges on it, and so forth. You can always report this to your bank and in most cases get these charges reversed — which will take from weeks to month. However, apparently at least 12% of all folks that bank online rarely/never check their account statement, and hence never catch the fraud if they were not defrauded not for a significant amount.

That is why it is crucial for you to use different and unique passwords that are hard to guess and contain both letters and numbers for each different online banking financial institution. And the safest place to save them is written down on paper and not on your computer, so if anyone does get access to it, he or she will find nothing of interest.

Online-Bank.ca also urges you to read our tips and hints on online banking fraud prevention.

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Related posts:

1. Online Banking Fraud – ‘Knebber’ Security Threat Alert, February 2010
2. Online Banking Safety Tips And Online Fraud Prevention
3. Online Banking Phishing Scam Warning From American Bankers Association
4. Safe Online Banking Tips from AVG
5. List of Online Banks – Online Banks List (Worldwide)