Phishers and cyber thieves have been casting an unusually wide net lately, blasting out huge volumes of fraudulent email designed to spread password-stealing banking Trojans. Judging from the number of victims who reported costly cyber heists in the past two weeks, many small to medium sized organizations took the bait.

Security firm Symantec says it detected an unprecedented jump in spam blasts containing “polymorphic malware,” — malicious software that constantly changes its appearance to evade security software. One of the most tried-and-true lures used in these attacks is an email crafted to look like it was sent by NACHA, a not-for-profit group that develops operating rules for organizations that handle electronic payments, from payroll direct deposits to online bill pay services.

Using NACHA’s name as bait is doubly insulting because victims soon find new employees — money mules — added to their payroll. After adding the mules, the thieves use the victim’s online banking credentials to push through an unauthorized batch of payroll payments to the mules, who are instructed to pull the money out in cash and wire the funds (minus a commission) overseas.

On Sept. 13, computer crooks stole approximately $120,000 from Oncology Services of North Alabama, a component of the Center for Cancer Care, a large medical health organization in Alabama. John Ziak, director of information technology at the center, said he suspects the organization’s accounting firm was the apparent source of the compromise. That means other clients may also have been victimized. He declined to name the accounting firm.

Ziak said the bank was able to block some of the fraudulent transfers, but that it was too soon to say how much the thieves got away with. But the center may have better leverage than most victims in convincing the bank to accommodate them: Many of its doctors are on the board of directors of the organization’s bank.

“We still don’t know how much is going to be coming back,” Ziak said. “We can chalk it up to lessons learned, but we’re going to be making some changes with the bank…forcing them to implement a higher level of security for our account.”

Last month, computer crooks also robbed the North Putnam Community School Corporation, which serves the children of six northern townships of Putnam County, Indiana.

Mary Sugg Lovejoy, superintendent of the K-12 school system, said thieves stole about $98,000 from school coffers, sending the money to numerous individuals who had no prior business with the school district. Fortunately for North Putnam, all of the fraudulent transfers were returned shortly after the attack, Lovejoy said.

In a separate attack on a public institution, malicious hackers last month struck the City of Oakdale, Calif., according to a story in the Modesto Bee. High-tech criminals stole $118,000 from a city bank account, the publication reported last week. Oakdale city officials are confident that its insurance carrier would reimburse the loss, minus a $2,500 deductible.

But that story ended on a sour note. The reporter quoted officials from the city’s bank, Oak Valley Community Bank, wrongly laying blame for the incident on a lack of technology and security.

“It’s the same story we hear from a lot of institutions,” Oak Valley President Chris Courtney said. “It’s about safekeeping the information on your computers, scanning for viruses and having a state-of-the-art security system.”

Blocking these attacks has little to do with state-of-the-art computer systems or scanning files with anti-virus. It’s not clear what malware family was used in any of these attacks, although the first two mentioned in this story involved a cyber gang that favors the ZeuS Trojan (the fraudulent NACHA messages in the screen shot above contained a malware dropper that installs ZeuS). But organizations should understand that these attacks have far more to do with social engineering and tricking humans than with defeating technology and security solutions.

As I’ve noted in past stories, all of the victims I’ve interviewed were running anti-virus software: Very few of them had protection against the malware used in the attack until after their money was stolen.

Most commercial banks have significant room for improvement in securing the transaction and authentication space for their customers. But businesses that rely on their financial institutions to detect fraudulent activity are setting themselves up for an expensive lesson.

No single approach or technology will stop all of these account takeovers, but preventing the theft of your online banking credentials is a critical first step. That’s why I continue to advise that small- to mid-sized organizations use a dedicated computer for online banking. Using a non-Windows PC — such as a Live CD or a Mac — is the safest approach, but not necessarily the most practical or affordable. An alternate approach is to access bank accounts from an isolated PC that is locked-down, regularly updated, and used for no other purpose than online banking.

Tags: Center for Cancer Care, City of Oakdale, cyberheist, John Ziak, Mary Sugg Lovejoy, Modesto Bee, North Putnam Community School Corporation, Oak Valley Community Bank, Oncology Services of North Alabama, zeus