Sen. Charles Schumer (D-N.Y.) has introduced a bill that would protect municipalities and school districts against financial losses resulting from certain types of cybertheft.
Under the proposed bill, cities, towns and school districts would not be held liable for losses tied to online account takeovers and fraudulent electronic funds transfers initiated by cyberthieves, as long as the theft is reported in a timely manner.
It is the same sort of protection that consumers have under the Electronic Fund Transfer Act, which caps consumer liability for an unauthorized EFT at $50. Schumer’s bill (S. 3898) would modify portions of the EFTA to offer the same protection to schools and municipalities.
The idea of moving the liability electronic funds transfer fraud from the bank account holder to the bank will force banks to implement better protection measures.
In our opinion, there are only two ways online account holders can protect themselves from online bank fraud: (1) use a dedicated computer for online bank transactions, (2) use a dedicated encrypted bootable USB stick. Using just a separate browser, even in a separate virtual machine is not good enough.
If a dedicated computer is not feasible, we at Cymbel recommend Becrypt‘s Trusted Client solution.