Now, Every Keystroke Can Betray You

In a twist on online fraud, hackers and identity thieves are infecting computers with increasingly sophisticated programs that record bank passwords and other key financial data and send them to crooks over the Internet.

That's what happened to Tim Brown, who had account information swiped out of the PC at his Simi Valley store.

"It's scary they could see my keystrokes," said Brown, owner of Kingdom Sewing & Vacuum. "It freaks me out."

Brown learned of the scam only after security researchers stumbled onto a computer harvesting information from hundreds of PCs and felt compelled to alert some of the people who had the most data exposed. Realizing he was lucky to get the call last month, Brown changed his passwords and is hoping for the best.

"This even staggered us," said Alex Eckelberry, president of Sunbelt Software Inc., which found that the so-called keylogger program installed itself in a way most antivirus software could not block. "Online institutions now have to assume that the account holder may have been compromised."

Such security breaches are on the rise, even as other sorts of Internet scams decline.

Security experts attribute the new approach to rising savvy among both computer users and crooks.

Many users, for instance, know not to reply to unsolicited "phishing" e-mails requesting financial information, even if the requests appear to have been sent by a bank. The number of reported phishing attacks fell in July from June, according to the Anti-Phishing Working Group, which is backed by most of the biggest U.S. banks and Internet service providers.

But the number of programs aimed at stealing passwords more than doubled in the same period.

"We're seeing explosive growth in 'crimeware,' " said Peter Cassidy, the working group's secretary general. "It's really galloping."

Consumers are increasingly jittery: 42% say security concerns have caused them to change their electronic shopping habits, according to research firm Gartner Inc.

Banks and other institutions, though, encourage online transactions because they are cheaper than branch visits or calls to a customer service center.