Just read this report about the an increase in theft using Key Stroke spying. The report quotes a security compnay iDefense "keyloggers are typically spread by organized cybercrime rings, which have used them in the past to conduct large-scale money transfers to fund criminal activities. The programs have grown exponentially since 2001, when the firm detected just 275 of them."
Brings back to my previous post about two factor or multifactor authentication. Username / password mechanism is medieval and its time we had multifactor authentication at any website storing personal information including free email services. The industry is getting together and creating alliances for federating user identity , but before they do that, they have to ensure that the user privacy is first priority. Banks should be the institutions that take a lead in this and start working on a solution. Bank of America has a "site key" authentication mechanism, not very effective but atleast a step in the right direction.
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