US bank offers cyber insurance against wire-transfer fraud

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Published: June 22, 2016 8:51:37 AM

Grandpoint Bank on Tuesday introduced cyber insurance policies to reimburse business customers for fast-growing wire-transfer fraud schemes.

cyber insuranceIn business email compromise schemes, fraudsters pose as executives or vendors from a business, sending requests for money transfers to accounts controlled by criminals. (Representative image) (Reuters)

Grandpoint Bank on Tuesday introduced cyber insurance policies to reimburse business customers for fast-growing wire-transfer fraud schemes.

Los Angeles-based Grandpoint, a commercial bank with operations in Southern California, Arizona and Southern Washington, said it is the first bank to market such policies.

The approach is similar to mobile phone carriers offering customers insurance for lost or stolen phones, which is also available directly through insurers.

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Grandpoint said the coverage includes losses from wire-transfer scams including business email compromise.

In business email compromise schemes, fraudsters pose as executives or vendors from a business, sending requests for money transfers to accounts controlled by criminals.

The US Federal Bureau of Investigation last week warned that business email compromise scams have grown dramatically over the past year.

FBI data shows that criminals have sought to use such scams to steal more than $3 billion since June 2013.

Grandpoint said the policy, which is underwritten by Hiscox Inc, a unit of Hiscox Ltd, costs $30 to $70 per month for up to $1 million in coverage.

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