Independent business owners may find themselves deep in debt after hackers wipe out their bank accounts, with banks reluctant to recoup losses caused by online attacks, according to a report in the New York Times.
The article, in the Thursday edition of the Times, details several so-called “corporate account takeovers.” Small business owners often fail to take basic precautions to prevent attack, such as the use of firewalls, monitoring systems. And, after attacks happen, many lack adequate fraud insurance to make their businesses whole again.
In a survey from The Hartford released last week, the investment and insurance firm found that 85 percent of small business owners weren’t afraid of getting breached. Perhaps more alarming, almost half of the businesses interviewed also lacked adequate security measures to prevent sensitive information from being leaked.
Judging by the Times article, that lack of concern is misplaced. The article recaps stories from several victims over the last few years: Mark Patterson, whose construction company Patco was nabbed of $588,000 in 2009; Karen McCarthy, whose marketing firm Little & King lost $164,000 in 2010; and Ann Talbot, the chief financial officer of construction company Golden State Bridge, who found that $125,000 had been siphoned from her company’s bank account in 2010.
The bulk of business owners don’t give fraud insurance the slightest thought however. In fact, only one in 10 businesses ask for it when buying insurance policies, claims McCarthy.
Small businesses need to deploy firewalls and keep their software and rules current. Companies of all sizes need to limit the number of employees with access to accounts and prohibit social media use. Finally, small businesses need to be vigilant and monitor bank balances. Golden State Bridge was able to recover $29,000 of the $125,000 lost. Patco recouped $200,000 of the $588,000 the company had stolen. The rest of the money, including legal fees for Patco, was lost.
For more on this, head to the New York Times.