Thursday, May 26, 2011

Insider data theft costs Bank of America $10 million

          A Bank of America insider who sold customer data to criminals cost the bank at least US$10 million in losses.

          Bank of America began notifying customers of the incident recently, but is not providing many details of the case which is still under investigation. The theft, "involved a now former associate who provided customer information to people outside the bank, who then used the information to commit fraud against our customers," said Bank of America spokeswoman Colleen Haggerty, in an email message.
The bank lost at least $10 million to the criminals, said James Kollar, a special agent with U.S. Secret Service in Los Angeles. "There was information that was coming from the bank to the outsiders," he said. "It was basically a check scam."

          About 95 members of the loosely affiliated criminal gang behind the alleged fraud, including the bank employee, were swept up in a February 2011 law enforcement action, James said. However, the names of the accused have not been released, and the court case is under seal as the investigation continues.

          The scammers had stolen, "names, addresses, Social Security numbers, phone numbers, bank account numbers, driver's license numbers, birth dates, email addresses, mother's maiden names, PINs and account balances." It appears that this information was then used for identity theft.

          According to one victim, quoted in the LA Times story, the scammers ordered boxes of checks and had them delivered to a UPS outlet where they would then pick them up. They also allegedly contacted the victim's telephone company and -- to prevent BofA from warning the victim -- rerouted calls to the scammers' mobile phone.
They also allegedly contacted the bank via telephone and moved more of the victim's money into the account they controlled. All told, they stole more than $20,000 from this one victim.

          It's not clear how many bank customers were actually affected by the fraud. There were "about 300" victims, located in the western U.S. But on Wednesday confirmed that this number was accurate, and din't say how many notification letters Bank of America is sending out.

          Customers who were hit by the fraudsters will receive two years of free credit reporting. Companies have taken a special interest in the threat posed by disgruntled insiders, after all of the publicity surrounding WikiLeaks. "We saw a lot of organizations wake up and hear the message that we've been saying for a very long time: That the insider threat is there". Unfortunately, that spike in interest, "seems to be temporary. There's still a ways to go in addressing the insider threat as well as the data leakage problem."

          Often leaks happen in the few months before a disgruntled employee leaves his job.

0 comments:

Post a Comment