In the past Computer Fraud and Funds Transfer Fraud were confined to discussions of the ubiquitous Nigerian email scams that continue to flood our spam filters or inbox. You may want to reconsider your vulnerability to this contemporary form of bank robbery. Unfortunately, in this form of theft, it is not the bank’s money, it is yours. And quite likely the bank will tell you exactly that when you find out that this loss did not have anything to do with one of your employees or one of your computers.
A more detailed review of emerging Crime Insurance Policy forms indicates that beyond the standard parts 1 though 4, parts 7 and 8 can include Computer Fraud and Funds Transfer coverage. This would apply to losses to property or money that are perpetrated from any computer or facilitated by other than your employees and transferred outside the premises to a person or a place outside the premises. (Theft by your employees may be covered under part 1)
What can you do other than reviewing your coverage under your crime policy? First, talk to your bank and be sure you clarify how your bank may or may not respond to such a theft. Talk to them about what if any safeguards you can put into place with respect to your accounts to either flag potential fraud or add additional layers to the process that require confirmation contact back to your trusted finance leaders in your company. Educate your employees about the possibility of such loss and how to monitor your accounts on a daily basis to detect potential threats.
Another business vulnerability may also include your contracted PBX phone system. Forget about large cell phone charges for international phone calls, they are small compared to tens of thousands of dollars in data access charges to remote foreign countries that you may be liable for under your agreement with your leased line providers. The research is still out on what if any insurance coverage you may be able to obtain to indemnify you for this. A better option is to work out a plan in advance with your vendor with respect to international access, fraud flagging and other security features you may be able to institute within your system.
The bottom line is the fact that in today’s economy and in today’s sophisticated technology world, this problem will continue to grow before it is brought under control. As in the days of “cracking the safe” and yesterday’s “cracking the code”, as soon as one safeguard is perfected, another way to defeat it is born.