Bank Agrees to Reimburse Hacking Victim $300K in Precedent-Setting Case

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Explore:  Fraud

This Wired Magazine article features Bernstein Shur Attorney Dan Mitchell.

In a case watched closely by banks and their commercial customers, a financial institution in Maine has agreed to reimburse a construction company $345,000 that was lost to hackers after a court ruled that the bank’s security practices were “commercially unreasonable.”

People’s United Bank has agreed to pay Patco Construction Company all the money it lost to hackers in 2009, plus about $45,000 in interest, after intruders installed malware on Patco’s computers and stole its banking credentials to siphon money from its account.

Patco had argued that the bank’s authentication system was inadequate and that it failed to contact the customer after its automated system flagged the transactions as suspicious. But the bank maintained that it had done due diligence because it verified that the ID and password used for the transactions were authentic.

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Topics:  Fraud

Published In: Civil Remedies Updates, General Business Updates, Finance & Banking Updates, Privacy Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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