Sheltered Harbor Program Uses "Buddy System" to Protect Financial Institutions from Cyber-Criminals

Increased prevalence of new technologies in pretty much every industry over the past few decades has led to improved quality and efficiency of service across the board. While technological improvements have, as a whole, provided more benefits than drawbacks in the modern day, one major concern has made its way to the forefront in recent years. With the technological advances has come cyber attacks, which put personal data and financial information at risk. Yalman Onaran's article in the L.A. Times discusses a method that financial institutions have been developing to protect trillions of dollars in funds from hackers.

From checking and savings accounts to retirement and pension funds, there are trillions of dollars being stored through various banks and brokers. Those assets tend to be insured, such as in the case of a bank robbery, the clients of the bank will get their money back. The difference between a physical robbery and theft via cyber attack is that hackers will often delete data from the targeted system, which can lead to great turmoil for a banking institution without sufficient backup data.

Many of the larger companies keep their data backed up on private secure servers, but that doesn't help much if the cyber attack shuts down their entire system. In a situation where the entire system is targeted and taken down, it can take days or even weeks for the company to get everything running properly again. The main issue with that, especially among banks, is that their customers need to access their accounts on a daily basis. The average person can't just wait uncertainly for days on end without access to the money in their checking account.

Financial institutions began to worry that such a hack at any banking entity, no matter how small, could cause significant ripples throughout the entire financial system. For example, if people hear that a bank was hacked (even if the bank is not theirs), and if they see that the customers of that bank can't access their money, they would be less likely to trust their own bank and could possibly go to withdraw their money, to prevent their funds from getting tied up if their bank was hacked. If enough people followed suit, it would become a wave that could crash the entire infrastructure, as banks don't actually have enough money in-house to cover most of their customers, since they lend out the majority of it to other customers.

A project called Sheltered Harbor is aiming to avoid such potential issues by teaming up financial institutions. By pairing them up, if one bank was hacked and had their system shut down for any length of time, the other bank would have a backup of their data and could assist their customers. The same would work in reverse. So, unless a sophisticated cybercriminal could predict and target the exact banking institutions that had been paired, Sheltered Harbor's system should be able to prevent an all-out meltdown of the financial system. That means that trillions of dollars in savings and retirement accounts will remain protected.

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Scam Uses Stolen Credit Card Data to Illegally Resell Gasoline

Improvements in technology are great in many ways. They save money, make life more convenient, and help people to do good in the world. However, technological advancement can often have drawbacks as well. One of the main issues in recent years is the average criminal's increasing ability to get away with financial crimes. The more technologically advanced something is, the more opportunities there are for criminals to hack in or scam people. According to an article by the Associated Press of the Los Angeles Times, one of the latest scams involves using stolen credit card information to resell gasoline on the black market.

The first part of the scam involves attaching 3D-printed credit card "skimmers" to ATMs or other credit card readers, such as those at gas stations. When someone swipes their card through the skimmer without realizing that it's not actually part of the machine, it records the credit card's data for the scammer's use. Then, the scammer is able to transfer the information to a fake card later, which they can use to make purchases. As devices get more advanced and criminals become more tech-savvy, the crimes continue to increase.

Once they have the counterfeit cards with someone else's data on it, the thieves go to gas stations with specially-designed trucks with hidden fuel tanks that can hundreds of gallons of gasoline. Then, they go off and empty the fuel from the trucks into 4,500-gallon industrial tankers. Finally, the tankers turn around and sell the gasoline back to the gas stations or to people on construction sites or to truckers looking to get a discount. Even the smallest gangs of criminals can steal thousands of dollars per day in gasoline, which can be more profitable with fewer risks than other money-making scams.

These types of crimes started sometime around 2006 when the skimmer technology was first developed. Since then, thieves have been using the strategy more and more, mainly in populous states with many busy interstates, such as California, Florida, and Texas. At first, law enforcement did little to combat these crimes, since they were only targeting a couple hundred dollars per transaction. It was seen as a "victimless crime," because the targets could dispute the charges on their credit card statements and generally get the money back. Because of the "slap-on-the-wrist" view of this type of crime, more and more thieves joined up, to the extent that some gangs are making up to $20 million per year off of stolen gasoline.

Because this is a financial crime, the US Secret Service is  involved and is investigating various gangs of criminals, shutting down these groups when they can, and are working on instituting tougher laws to dissuade other criminals from going after the "low-hanging fruit." Gas stations are also looking into installing devices on their pumps that shut the machine down if it is tampered with. Generally, everyone should just be on alert and do what they can to avoid being targeted by a similar scam. Be careful when using your credit card somewhere you don't trust, and if something looks suspicious, you should report it to the authorities.

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