14 October 2015

Bank settles with hacked customer over ACH fraud losses

29 November 2012  |  7357 views  |  0 handshake

A US bank has finally settled with a former business customer after years of legal wrangling over who was responsible for the loss of more than $500,000 in a cyber-attack.

In 2009 malware was used to steal Patco Construction Company's online banking credentials which the crooks then tapped to make ACH transactions worth hundreds of thousands of dollars.

Patco sued People's United - then called Ocean Bank - for the money it lost, arguing that the bank should have spotted the fraud and stopped it. The construction firm also said that by not requiring customers to use multi-factor authentication, Ocean did not use best practice.

Last year a court backed the bank but in July this was reversed by the First Circuit Court of Appeals in Boston, which called People's security measures "commercially unreasonable".

According to BankInfoSecurity, the court also told the pair that they should look to agree an out-of-court settlement. This advice has been taken and the bank has agreed to pay Patco for its losses. Initially the construction firm had also sought damages and legal fees.


Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

20 June, 2012
19 July, 2011
17 June, 2011
08 June, 2011
Your browser is unable to support Flash files.

Top topics

Most viewed Most shared
European Parliament rubberstamps Payment S...
11790 views comments | 49 tweets | 66 linkedin
Banks must embrace fintech-fuelled payment...
9553 views comments | 35 tweets | 27 linkedin
Global transaction banking set to be a key...
6993 views comments | 10 tweets | 22 linkedin
London fintech investment in first three q...
6734 views comments | 30 tweets | 20 linkedin
Chinese hackers breach LoopPay
5823 views comments | 8 tweets | 7 linkedin

Featured job

to $120K base, double OTE, benefits
New York City, NY or Boston, MA (USA)

Find your next job