Scammers Siphon Money From President Sarkozy's Online Bank Account; Gov't Blames Itself

from the misplaced-blame? dept

There are a bunch of news stories showing up about how some scammers apparently were skimming some money from the online bank account of French President Nicolas Sarkozy. According to the report, the scammers probably only had account numbers and login info, and they didn't even realize from whom they were stealing. That said, what's more interesting is the government's response to the theft. Rather than suggesting banks should improve their security, the secretary of state for consumer affairs notes that an investigation is under way to see how the government can improve the security of the banking system. While it does seem quite rare for a government to take responsibility for problems, in this case, it seems a bit misplaced. It's not clear what role the government had in this scam whatsoever.

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Failures

by Mike Masnick

Mon, Oct 1st 2007 12:48am

Early Internet Bank Shut Down By The Feds Over Mortgage Defaults

from the ouch dept

If you remember the earlier days of the web, you'll probably remember NetBank, which was one of (if not the?) first internet-only banks out there. It offered high interest rates in the early days, making it popular with online folks in the late 90s. To be honest, I hadn't heard much about it lately and wouldn't even have known if it still existed until I read that the FDIC was shutting the bank down after it had too many mortgage defaults. The FDIC, of course, insures bank accounts up to $100,000 -- and all of the insured accounts are going to be transferred to ING (another popular online bank). Unfortunately, it appears that more than a few people had more than $100,000 in their accounts, totally around $109 million in accounts that were uninsured. For the folks who had more than $100,000, they now need to get in line with various other creditors for whatever is left of NetBank -- meaning that they'll probably get pennies on the dollar. While some may paint this as a sign of problems with internet-only banks, it sounds more like the problem was in how NetBank chose to approve mortgages -- an area it was hardly alone in screwing up over the last few years.

12 Comments | Leave a Comment..

(Mis)Uses of Technology

by Mike Masnick

Mon, Sep 17th 2007 3:04pm

What An Online Bank Run Looks Like

from the 404-page-not-found dept

In the bad old days (or in countries with questionable financial situations) when there were concerns a bank might run out of money, there would be an old-fashioned "bank run," with tons of customers all trying to withdraw their money at once. That could cause all sorts of problems, since most banks work on the theory that such runs won't happen. Thanks to the FDIC, you don't see bank runs in the US these days, but apparently that's not the case in the UK, where concerns over the financial status of the bank Northern Rock led to what certainly looks like an old-fashioned bank run. However, in this modern age, not everyone is lining up on the street to get into their nearest Northern Rock branch. Apparently, the bank's website has experienced the equivalent of a bank run on its servers -- meaning that they've been pretty much unable to handle the traffic, frustrating a number of online account holders who say the terms of service say the only way they can retrieve money is via the online interface. Of course, the fact that many of those account holders can't even reach the site is leading to increased panic among those who fear that the site is down permanently. Apparently, even if the interface is different, an online bank run pretty much mimics the offline one.

9 Comments | Leave a Comment..

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Scammers Siphon Money From President Sarkozy's Online Bank Account; Gov't Blames Itself

from the misplaced-blame? dept

Early Internet Bank Shut Down By The Feds Over Mortgage Defaults

from the ouch dept

What An Online Bank Run Looks Like

from the 404-page-not-found dept

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