Kathy Kristof reports on a story that should make everyone who banks online think about whether they, too, are at risk:
…. Seven years ago, Fan Bao opened a checking account at Bank of America to facilitate his small import-export business called ZICO USA. When he needed to wire money, he or his wife, Cathy Huang, would walk a few blocks to Bank of America’s Highland Park, Calif., branch and execute the transfer in person.
But two summers ago, a BofA branch official urged Bao to do his banking online, assuring him that it was every bit as safe as banking in person. Only wires sent from Zico’s computer, accompanied by a downloaded security certificate, would be honored, he was told. Bao followed the bank’s security instructions to the letter, and accepted the bank’s assurances that his money was safe.
But last summer, two fraudulent drafts were sent through Bao’s account–one for $50,000 and another for $99,100. Both drafts were going to a bank in Croatia that Bao had never done business with. In fact, Bao had never before sent a wire transfer to anyone outside of Hong Kong or China.
[…]
Huang immediately denounced the charges as unauthorized and fraudulent. The bank was subsequently able to stop payment on the second draft for $99,100, but the other $50,000 already had been paid to the Croatian bank and the money had been withdrawn. When Bao asked for the money back, Bank of America told him the missing $50,000 wasn’t their problem.
Read more on Money Watch.