Banks could refuse fraud refunds
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People who ignore safety advice and lose money in online banking scams could be refused refunds by banks.
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Apparently it&#39;s not just unwary individuals that fall victim to online scammers. Even large corporations, it seems, can get suckered into parting with their money by devious&#160;phishers.Case in point: Eden Prairie, MN.-based grocery chain Supervalu, which earlier this year got conned into depositing more than $10 million into two fraudulent bank accounts before recognizing the ruse. Details of the case are contained in court documents filed in connection with two forfeiture cases stemming from the incident.According to federal court filings in the U.S. District Court for the District of Idaho, the fraudulent activity took place in late February and early March this year. In the court filings, Stephen Kilgroff, Supervalu&#39;s vice president of legal affairs, said that on February 26 and 28 the company received two separate e-mails, one purporting to be from an employee at American Greetings Corp. and the second from an employee at Frito-Lay, both company-approved vendors.Both e-mails told Supervalu to send future payments for each vendor to new bank account numbers. In the case of the e-mail that purported to be from American Greetings Corp., Supervalu was advised to send payments to an HSBC account in Miami. The other e-mail advised Supervalu to send Frito-Lay payments to an account at First Security Bank in Rogers, Arkansas.Between Feb 28 and March 3, Supervalu deposited just over $6.5 million via multiple wire-transfers to the HSBC account, thinking that it was sending the money to American Greetings Corp. Similarly, on March 2 it made eight separate wire-transfers to the bank in Arkansas, depositing a total of $3.6 million to an account it thought belonged to Frito-Lay.In addition to the $6.5 million deposited by Supervalu into the HSBC account, an additional amount of $500,000 had been deposited into the same account by a second company, identified as &quot;ROHM&quot; on court documents. No information has been available concerning the second company, and it is not a party to subsequent litigation.Around March 6, according to the filings made by Kilgroff, Supervalu discovered that it had been &quot;induced&quot; into making the transfers to the bogus accounts. Following the discovery of the fraud, Supervalu quickly notified the appropriate law enforcement authorities, who managed to recover nearly all of the money before it could be withdrawn from the accounts.The recovered money is now being claimed by Frito-Lay, American Greetings and Supervalu. In making the claim to the recovered money, Frito-Lay said that it believes the money belongs to Supervalu and said supported that company&#39;s claim to ownership of the misdirected funds.&quot;However to the extent there is any determination that the ownership of these funds changed from Albertsons/Supervalu [the Albertsons grocery chain was recently acquired by Supervalu] to Frito-Lay (as a result of the attempted transfer, the misdirection, or any other development) Frito-Lay makes this claim to these funds in the alternative and subject to any claim of ownership by Albertsons/Supervalu&quot; the company said in an affidavit.A federal judge is expected to rule sometime in November on which firm should receive the recovered funds.A spokeswoman from Supervalu responded via e-mail to a request for comment. &quot;As indicated by the forfeiture complaint filed by the U.S. Attorney&#39;s Office in Boise, Supervalu was the target of attempted financial fraud,&quot; spokeswoman Haley Meyer said. &quot;Due to our internal controls and processes, we were able to quickly discover and report this to the FBI. As a result of the quick work of the Boise FBI Office and the U.S. Attorney, any funds lost are minimal.&quot;Computerworld is an InfoWorld affiliate.&#160;
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Customers can't sue Old National Bancorp in the wake of a hack attack that exposed thousands of them to the risk of identity theft, the 7th U.S. Circuit Court of Appeals says.
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Courts are starting to push back  against a U.S. government crackdown on corporate fraud as  prosecutors and regulators test the limits, legal experts say.
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Business & money: Ill-judged comments saw deluge of customers reclaiming bank charges, says lawyer
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Business & money: Business leaders oppose stronger powers to investigate breaches.
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(InfoWorld) - WithÂ Internet fraud on the rise, French banks and merchants are not putting in place antifraud technology to catch bad online transactions, an official from France's central bank said Thursday. Some banks are reluctant to put into place stronger mechanisms, such as requiring customers to use one-time passwords, because of high deployment costs as well as the reluctance of customers to use it, said Marc Andries, who works in the non-cash means of payment oversight division for the Bank of France. Paradoxically, the introduction of authentication technology prompts some consumers to question the security of their bank, said Andries, who gave a presentation at Fraud World 2007 in London. Nonetheless, the rise in online banking fraud and card-not-present (CNP) fraud -- in which someone's credit-card details are used for an online transaction without the need for the physical card -- demands a solution, he said. As a result, the Bank of France is in an "intensive dialog" with financial institutions to adopt new security technology, Andries said. The Bank of France will not, however, dictate how banks should strengthen their security or what technology they should use, he said. That is in contrast with the U.S., where the Federal Financial Institutions Examination Council, which supervises U.S. financial institutions, mandated that banks implement two-factor authentication by the end of 2006. Merchants in France who conduct e-commerce transactions tolerate CNP fraud because e-commerce is soaring, and they can buy insurance to guard against losses, Andries said. "They accept it because it's part of the business," he said. CNP fraud has risen as face-to-face transaction fraud has fallen with the widespread deployment of so-called "chip and pin" technology in Europe, where consumers must enter a four-digit personal identification number in a terminal before completing a transaction. As a result, criminals have turned to CNP fraud, where the credit-card details, obtained through phishing or other scams, are used for e-commerce transactions. But that fraud can be reduced by using systems that use a combination of data to better authenticate the transaction. Security software can check the card's security code -- the three-digit number on the back of the card -- along with part of the customer's post code or house number. Consumers aren't putting much pressure on either banks or merchants since they can contest fraudulent CNP transactions, Andries said. But they don't get off that easy, since "in the end, the losses are paid by the client of the merchant through inflation, and that's not good for the central bank," Andries said.
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Business & money: Sports chain to part-refund customers who were overcharged for replica football shirts
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Financial institutions are asking law enforcement and regulators to share more data to better combat fraud.
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U.S. lawmakers wrote to regulators on Monday expressing concern that some banks are processing unsigned checks used by fraudsters seeking to drain money from the accounts of vulnerable people.
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Refusal to hand over secret payments evidence could endanger sharing of intelligence.
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Told to clean up their act The Information Commissioner has told 11 UK banks to stop dumping customers' statements in bins on the pavement outside branches.â¦
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True or false: If a check "clears" within the typical one to five business days but later is discovered to be fake, the bank customer who deposited the check and subsequently spends the money cannot be held financially responsible for the fraud.
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Console maker accused of fraud, accuses bank of misrepresentation
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How to steer clear of "free checking" pitfalls.
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Bank of New York reportedly is negotiating with federal prosecutors to avert a potential criminal indictment. The Wall Street Journal reports that the bank is facing charges it failed to report suspicious activity at one of its branches.
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Supermarkets could face multi-million pound fines.