Beware! Fax Attacks!

ABA Banking Journal, June 1990 | Go to article overview

Beware! Fax Attacks!


Beware! Fax attacks!

Modern technology can bring your bank modern problems. But solutions start by using the world's oldest processor--your brain

Fax machines are nifty gadgets. When properly used, they can expedite business with the speed of a telephone. But when used improperly, they could become a speedway to losses, leaks, and lawsuits.

There are numerous types of risks associated with fax machines. Some arise from banks' insufficient or nonexistent security procedures. Some are possible because of simple human error. Some can be blamed on physical risks--such as faxes that arrive at the right company but are delivered to the wrong office or taken from the fax area by other than the intended party. And other risks arise because fax machines aren't immune from eavesdropping.

SCOPE OF PROBLEM

Just how much of a problem fax security has been for the banking industry is difficult to say. There are rumors and anecdotes, but no hard figures.

The federal financial regulators have not focused on the issue. While the Federal Bureau of Investigation knows of investment frauds that have been committed using fax machines, the devices have generally been tools used to send messages used in a bigger scam, not the key to the fraud itself. And, like computer frauds, this is not the kind of situation banks would go out of their way to publicize.

Yet, if you consider the following situations, it becomes painfully obvious that the potential for big trouble is there.

* The case of the too-trusting bank. "Bank Z" manages a large pension fund for its state's employees. Every day, the state comptroller's office sends its investment instructions by fax. Though the funds affected total more than $1 billion daily, no security measures are taken. In fact, no one from the bank even makes a routine callback to the comptroller's office to verify that it really sent the fax about to be executed.

This is no hypothetical example. Robert W. Edwards, a consultant, recently came back from an inspection of Bank Z's operation. He conducted it on behalf of insurance underwriters weighing the prospective insured's potential risks. Edwards, president, Risks, Ltd., Keedysville, Md., says he knows of several other banks that deal with state finance departments who also accept investment orders in this way--also without taking precautions.

There's plenty that could go wrong. Edwards points out that Bank Z's lax security means that anyone who knows the general details of the state's portfolio and the operational arrangement between the comptroller's office and the bank's investment area could send in a fraudulent fax. This could direct funds to be moved to an account the thief could then draw from.

Further, because the lack of security permits such outsiders to send in orders by fax, Edwards says it would be fairly easy for a government insider to commit a fraud and make it look like an outsider was responsible. This kind of crime could remain unsolved, he adds, unless, say, "the state's comptroller went to lunch one day and never came back."

* The case of the wayward fax. The following case comes up nearly every time the issue of fax security is discussed--for obvious reasons.

In late 1988, one of the parties to a merger faxed a 47-page confidential memorandum on the subject to a major shareholder--or so it thought. Actually, the memo--complete with significant margin notes--had been faxed to The Wall Street Journal's Chicago bureau. The newspaper's fax number and the shareholder's differed by only one digit and a new employee at the corporation had misdialed. The newspaper went with the story and the company subsequently dropped out of the deal.

While misdialing is risky enough, another risk is misrouting. Carelessness in pulling fax numbers out of bank or other directories can result in sending a fax meant for Bank X to Bank Y instead. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Beware! Fax Attacks!
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.