When an individual’s credit, ATM or debit card is lost or stolen, federal law limits a consumer’s liability for unauthorized charges. Likewise, federal laws generally limit an individual’s liability for unauthorized electronic funds transfers and other fraudulent transactions to a personal bank account.
But when a business ‘s bank account is compromised as a result of cybercrime, or when a business becomes a victim of Automated Clearing House (ACH) fraud, those organizations are often shocked to learn they’re left holding the bag for the amount of the unauthorized transactions. Unlike individual consumers, businesses aren’t protected and they don’t get their money back.
Cybercrimes are on the rise and the FDIC has seen an increase in reports of unauthorized electronic transfers made from bank accounts held by small businesses. According to the National Cyber Security Alliance, cyber-attacks cost small and medium-size businesses an average of $188,242 and almost two-thirds of victimized companies are forced out of business within six months of being attacked.
Implementing and maintaining a cyber-security plan is key, but businesses should also consider adding cybercrime insurance to their overall risk strategy.
Length: 2 pages (PDF 83 kB)