If Your Business Bank Account Gets Hacked, Your Bank May Blame You

This post is part of the series, SmallBusiness.com Guide to Business Computer and Tech Security: Advice, alerts and information about digital security threats faced by small businesses. You can browse other posts in the series below.

  1. IRS Issues Urgent Warning to Small Businesses: Beware of W-2 Phishing Scam Return | 2017

  2. Lynda.com Alerts 9.1 Million Users After 55,000 Accounts Are Breached | December 2016

  3. What Does HTTPS Mean? And Why a Small Business Website Needs the ‘S’

  4. Yahoo Security Breach is Another Reminder of Why Password Protection is Critical to Your Business

  5. Homeland Security Tips for Choosing Harder to Hack Passwords

  6. Passwords Are Stolen Everyday; How to Protect Yours From Being One of Them

  7. How to Recognize and Avoid an Attempt to Crack Your Two-Step Verification Passwords

  8. How Voice Recognition Software is Being Used to Detect Cyber Criminals

  9. How to Avoid a New Cyber Attack Attempting to Access Small Business Bank  Funds

  10. Seven Resolutions for 2016 That Will Help Protect Your Small Business Computers

  11. Top Ten Free Antivirus Utilities For Your Small Business | 2016

  12. Most Small Businesses Have No Cyber Attack Response Plan

  13. If Your Business Bank Account Gets Hacked, Your Bank May Blame You

  14. Why You Should Still Use a Password Management System, Even if You Heard One Was ‘Hacked’

  15. Advice From Google on Avoiding Scams Directed at Small Businesses

  16. More Tips for Actively Managing Your Passwords

  17. What Small Business Customers Should Know and Do About the JPMorgan Chase Cyberattack

  18. How Hackers Use ‘Social Engineering’ and How to Prevent It

  19. Ten Tips From the FCC for Improving Your Small Business Cyber Security

  20. Password Protection Advice from SmallBusiness.com

  21. Ebay Asks 145 Million Users to Change Passwords

  22. What is Two-Step Verification and Why You Should Start Using Them

  23. How (and Why) to Use a Password Management Application

  24. How to Reduce the Odds of Being Hacked While Using Public Wifi

Cyberthieves steal hundreds of millions of dollars a year from the bank accounts of U.S. businesses. Many business owners are discovering their bank is not required to make them whole.

Next time you hear a commercial from a bank touting how friendly it is to small businesses, re-read or re-play this story from John Ydstie of NPR’s Morning Edition.

In it, he shares the alarming stories of several business owners whose bank accounts were hacked by cyberthieves, but whose banks refused to reimburse them.

Why? Because they don’t have to. No kidding.

“Individuals are pretty well-protected when it comes to fraudulent transfers from their bank accounts. Regulation E of the Electronic Fund Transfer Act requires banks to bear the burden in most circumstances. That’s not the case for small businesses, even if they’re owned by a single person.” – John Ydstie (NPR)

The law does require banks, under the Uniform Commercial Code, to offer business customers a “commercially reasonable” security protocol. If the bank follows that protocol, it can refuse to reimburse businesses that are victims of fraudulent money transfers.

And before you start thinking this couldn’t be that big a problem, it’s big and growing. The most recent FBI data show a huge growth in this kind of fraud against businesses. More than 8,000 companies have been victimized over the past two years. Their losses total nearly $800 million.

(Continue reading on NPR.org: “When Cyber Fraud Hits Businesses, Banks May Not Offer Protection“)

 Photo: Thinkstock