19Jul

Hacker Drained $438K from Local Union

When Overdraft Protection Doesn’t Protect

A local Connecticut chapter of a nationwide union suffered a $438K loss as the result of a cyber crime. A hacker posed as the union’s secretary-treasurer after gaining access to her personal email account. Over a six week period the hacker requested about a dozen payments from the union’s payroll service company. The theft finally ended when the union’s bank contacted the customer to inform them their account was overdrawn.

Police, FBI and the Secret Service are involved in the investigation to identify and track down the perpetrators.

Luckily the union had insurance but it only covered part of the loss. They are hoping to get the remainder from their payroll company’s insurer.

Read the full story here.

When Overdraft Protection Doesn’t Protect

Make sure your company implements strict rules regarding communications to vendors relating to financial transactions. Communications should be made from work email only.

Always have employees send data to the payroll check processor early enough to allow the processor to receive and review the payroll reports before checks are printed.

Check with your financial institution to see if they offer an automated fraud projection tool such as Positive Pay which can match the account number, check number and dollar amount of each check presented for payment against a list of checks previously authorized and issued by your company.

Make Sure Your Clients Take a Proactive Approach To Protecting Their Business Should a Loss Occur

Make sure your clients have crime insurance. Take the steps to ensure that your clients are covered by calling Berkley Crime.