"I can't fathom how one could consider a security procedure that makes it easy for people to steal money from school districts, churches and small businesses to be commercially reasonable," Woodhill said.

Woodhill faulted banks for downplaying or hiding the scope of bank heists, a posture he attributes to fear of undermining confidence in an online banking system that saves financial institutions tens of millions of dollars a year in transactions that don't have to be processed by a human teller.

Last year, Woodhill came to the rescue of Karen McCarthy, whose marketing firm was victimized by hackers in February 2010. McCarthy, who made one wire transfer on the same day every month, for $1,000, noticed a problem with her computer on Feb. 10. The screen had turned blue and appeared frozen, while other computers in her firm seemed to function normally.

McCarthy's Plans

In the weeks leading up to the frozen-screen episode, McCarthy had reached an agreement to sell her firm, Little & King. She'd bought out her lease, sold her office equipment and supplies and was preparing to join the new company as an employee, leaving behind the worries of business ownership.

After her computer froze, she printed out statements from Toronto Dominion Bank in preparation for the sale of her company. Over the Feb. 13-15 Presidents Day weekend, she couldn't figure out discrepancies between recent bank statements and the amount in her company's checking account. Finally, on the Monday evening, a national holiday, she checked her online banking account and saw five unauthorized wire transfers.

She called TD Bank in a panic. Because of the holiday, she was told no one was available. The next morning she marched into her TD Bank branch, in Massapequa, New York, and asked an assistant manager for help.

Calls Not Returned

At first the manager told her the bank would get her money back, she said. Once it became clear the funds were stolen, the bank stopped returning her calls, McCarthy said.

The theft derailed the sale of McCarthy's company, forcing her to raid her children's college funds for needed cash. Of the $164,000 stripped from her account, TD Bank recovered almost $95,000, leaving her about $70,000 in the hole -- and without an office or equipment, she said.

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