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September 7, 2011

Of 77 financial institutions that responded to a survey by the Financial Services Information Sharing and Analysis Center, 21 reported they had account takeover attempts in 2009 or the first half of 2010. There were a total of 108 commercial account takeovers reported during the first six months of 2010, compared to 86 for the full year of 2009.

In 36% of the reported account takeovers in the first half of 2010, monetary transactions were created but stopped before funds left the financial institution, compared to 20% in 2009. In 27% of reported account takeovers in the first half of 2010, monetary transactions were created and funds sent out of the financial institution, compared to 63% in 2009.

“We are very excited by these results,” said Bill Nelson, president and CEO, FS-ISAC. “These two statistics indicate that financial institutions are doing a better job of stopping transactions from being created and from leaving the financial institution.”

“These results are consistent with what banks have experienced in other areas, such as checking account fraud,” said Doug Johnson, ABA vice-president and senior advisor, and a member of the FS-ISAC board. “Over the last ten years, while we have seen attempted checking account fraud continue to rise, banks have become much better at detecting fraud before monetary losses occur. Now we are seeing the same thing regarding corporate and municipal account takeovers. This type of fraud continues to increase, but in the face of that increase banks are becoming more adept at stopping the fraud at the earliest stages and thus minimizing losses.”

The total exposure associated with commercial account takeovers was $15,781,530 in 2009 and $10,447,355for the first half of 2010. The average loss per commercial customer was $26.51 in the first half of2010 vs. $19.23 in 2009.

The purpose of this initial survey was to establish a baseline for commercial account takeover attempts and losses for 2009 and the first half of 2010. The survey is a deliverable from the Account Takeover Task Force, a public/private industry effort.

ABA, through its Benchmarking and Survey Research group led by Jane Yao, assisted FS-ISAC with the survey, developing the survey document, completing the tabulation, and summarizing the results. ABA has developed other resources to help bankers fight account takeovers, including educational tools for customers as well as takeover detection and response methods. For more information from ABA, contact Johnson at djohnson@aba.com.

FS-ISAC will conduct another survey in the near future, which will capture data for all of 2010. A follow-up survey for 2011 data is also planned.
 

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