Several cases in USA are resolving in online theft via bank account hackery. Here's one:
Village View Escrow Inc., which in March 2010 lost nearly $400,000 after its online bank account with Professional Business Bank was taken over by hackers, has reached a settlement with the bank for an undisclosed amount, says Michelle Marsico, Village View's owner and president.
As a result of the settlement, Village View recovered more than the full amount of the funds that had been fraudulently taken from the account, plus interest, the company says in a statement.
And two more:
Two similar cases, PATCO Construction Inc. vs. Ocean Bank and Experi-Metal Inc. vs. Comerica Bank, raised questions about liability and reasonable security, yet each resulted in a different verdict.
In 2010, PATCO sued Ocean Bank for the more than $500,000 it lost in May 2009, after its commercial bank account with Ocean Bank was taken over. PATCO argued that Ocean Bank was not complying with existing FFIEC requirements for multifactor authentication when it relied solely on log-in and password credentials to verify transactions.
Last year, a District Court magistrate found the bank met legal requirements for multifactor authentication and dismissed the suit.
In December 2009, EMI sued Comerica after more than $550,000 in fraudulent wire transfers left EMI's account.
In the EMI ruling, the court found that Comerica should have identified and disallowed the fraudulent transactions, based on EMI's history, which had been limited to transactions with a select group of domestic entities. The court also noted that Comerica's knowledge of phishing attempts aimed at its clients should have caused the bank to be more cautious.
In the ruling, the court required Comerica to reimburse EMI for the more than $560,000 it lost after the bank approved the fraudulent wire transfers.
Here's how it happens. There will be many of these. Many of the victims will sue. Many if the cases will lose.
Those that lose are irrelevant. Those that win will set the scene. Eventually some precedent will be found, either at law or at reputation, that will allow people to trust banks again. Some more commentary.
The reason for the inevitability of this result is simple: society and banks both agree that we don't need banks unless the money is safe.
Online banking isn't safe. It behoves to the banks to make it safe. We're in the phase where the court of law and public opinion are working to get that result.Posted by iang at June 20, 2012 04:42 PM | TrackBack