Cybercrooks increasingly target small business accounts

Fraudsters use online credentials to deplete corporate bank accounts, financial group says

An organization representing more than 15,000 financial institutions has issued a warning about a growing wave of attacks against small banks and businesses by cybercriminals using stolen banking credentials to plunder corporate accounts.

In an alert to its members earlier this month, NACHA–the Electronics Payments Association said that attackers are increasingly stealing online banking credentials, such as usernames and passwords, from small businesses by using keystroke-logging tools and other malware. The cybercriminals are using the stolen credentials to "raid" and "take over" corporate accounts and initiate unauthorized transfers of funds via electronic payment networks.

NACHA oversees the Automated Clearing House (ACH) electronic payments network.

A similar alert was sent confidentially last Friday to members of the Financial Services Information Sharing and Analysis Center, according to a story published in the Washington Post yesterday. According to the Post, the alert identified organized cybercrime groups in Eastern Europe as being predominantly responsible for illegally siphoning millions of dollars off of corporate accounts and sending the money overseas via popular money and wire transfer services.

The Financial Services Information Sharing and Analysis Center was formed by major financial services firms to share information about potential cyber and physical threats to their companies.

NACHA's alert said that the cybercrooks are apparently targeting small businesses because of their relative lack of strong authentication procedures, transaction controls and "red flag" reporting capabilities.

In some cases, the alert said, attackers trick people who work at small businesses into visiting phishing sites that have the same look and feel as those of the small businesses' financial institutions. Once they reach a phony site, the employees log in using the credentials they normally use for the legitimate site.

In other instances, keystroke loggers and data-stealing malware programs are downloaded onto corporate systems via e-mail attachments, and cybercriminals then use them to capture the usernames and passwords that employees use to log onto banking Web sites.

Some of the malware tools can send alerts to the crooks when a victim has logged onto the Web site of a financial institution. The tools then fool the user into thinking the banking site is not responding while a cyberthief quietly conducts transactions in the user's name, the alert noted.

In a "worst-case scenario" such compromises could lead to a complete takeover of a business's account, NACHA said. "To the financial institution, the credentials look just like the legitimate user," the NACHA alert said. Thus the attackers can gain access to all account details and activity. The crooks use the confidential credentials to quietly transfer funds to accounts set up by accomplices and unwitting "mules." Often, the stolen funds are ultimately sent to accounts overseas.

Because of a relative lack of account monitoring at many small businesses, unauthorized transfers can go unnoticed until it is too late to stop them, NACHA said.

NACHA did not respond to requests for comment on its alert.

Nick Holland, an analyst at Boston-based Aite Group LLC, a consultancy that focuses on the financial services industry, said the theft of banking credentials from small businesses has been an issue for some time.

But the use of the ACH network to illegally transfer substantial amounts of money out of corporate accounts in particular is a growing issue, he said. A survey of banks by Aite Group last year found the ACH network to be a potential security concern, Holland said. Criminals are targeting electronic payment networks because many businesses, especially smaller ones, have relatively few controls for preventing misuse of such channels to transfer funds out of an account, he added.

While financial services companies have put considerable emphasis on fighting credit and debit card fraud, there has been somewhat less of a focus on implementing the same kind of controls on electronic payment channels, he said. For instance, while an unusually large credit card transaction might trigger a fraud alert, a crook could initiate a similar ACH transaction without anyone "batting an eyelid" in many cases, Holland said. Once an attacker gains access to a company's banking credentials, transferring money out its corporate account using ACH transfers is not overly difficult, said BC Krishna, CEO of Memento Inc., a Concord, Mass.-based company that provides fraud detection services to financial firms. In fact, a harder task for those behind such thefts often is finding accomplices and "mules" willing to receive the stolen funds, he said. Many of the businesses targeted in such attacks do not know how to defend themselves and have few mechanisms for detecting cybertheft, he added.

Some of the malware tools used in such thefts have become increasingly sophisticated, allowing users to remain undetected while stealing the credentials, said Joe Stewart, director of malware research at SecureWorks Inc., an Atlanta-based provider of information security services.

He cited threats like the especially virulent Clampi Trojan. Believed to have infected tens of thousands of systems worldwide, the Clampi Trojan is designed to infect a machine and then push itself out to every other machine on a domain via a legitimate Windows administrative tool, he said.

Some tools are capable of using the victims' own browser to carry out a transaction, making the bank systems think they are dealing with a legitimate user, he said. Victims can get infected by such Trojans simply by visiting Web sites where the malware has been planted, or via e-mail attachments and even instant messaging systems, he added.

Companies that want to mitigate the risk of such theft need to ensure that ACH and wire transfer payments are always initiated under dual controls, NACHA said in its alert.

The organization also recommended the use of strong two-factor authentication to make it harder for someone to gain unauthorized access to an account. Alerts on unusual activity -- such as a sudden transfer of money to a newly created account, or a sudden increase in the number of transactions in an account -- can also help flag such fraud early, Krishna said.

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