High-tech crooks using spyware are costing US discount brokerages millions of dollars to repay clients who have been victimized by fraud, the brokerages, quoted by a Reuters report said.
The Reuters report said the US Securities and Exchange Commission warned earlier this month that scammers were hijacking online brokerage accounts using spyware and operating from remote locations.
TD Ameritrade Holding became the latest brokerage to confirm the problem, the Reuters report said, adding it cost the firm $4 million in the third quarter to make whole customers whose accounts had been hacked.
Harder hit was rival ETrade Financial, which last week said its fraud losses ballooned by $18 million in the third quarter from swindlers who stole clients' identities and manipulated their accounts, the report said.
Both brokerages guarantee to repay clients who lose money through such frauds.
A spokesman for a third discount brokerage, Charles Schwab said the company hasn't seen 'anything unusual enough to merit a disclosure,' the Reuters report said.