Federal Lawsuit Outlines Online Banking Procedures By Dan Mitchell

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Originally published in MainBiz on November 26, 2012.

Last July, the federal First Circuit Court of Appeals issued a first-of-its kind decision regarding the obligations of banks and their commercial customers in response to online cyber-thefts. The decision, Patco Construction Co. v. People's United Bank, involved a company in Sanford that lost $345,000 in an online cyber-heist of its business checking account in May 2009.

The prevalence of this type of fraud, known as corporate account takeover, is impossible to ignore. At a recent cybercrime symposium in New Hampshire, a room full of security officers from regional businesses listened to one speaker after another discuss the rising number of cybercrime cases, the increasing sophistication of cybercriminals and the international scope of the problem. Despite the efforts of law enforcement and a vastly increased sense of awareness on the part of the most businesses, cybercrime continues to be a low-risk, high reward activity.

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