Bank settles with hacked customer over ACH fraud

Bank settles with hacked customer over ACH fraud

A Californian business that sued its bank after a hacker drained its online account of around $400,000 has settled the case.

Village View Escrow's online Professional Business Bank account was hacked in March 2010 with thieves stealing the money in a series of wire transfers over two days.

The company filed a complaint with the California Superior Court, Los Angeles against the bank in 2011, arguing that its procedures failed to live up to Federal Financial Institutions Examination Council (FFIEC) and Federal Deposit Insurance Corp (FDIC) standards.

Now, according to the BankInfoSecurity site, a settlement has been reached with Village View receiving more than the amount stolen and interest.

The case was one of several in the US over the last two years that have seen banks and business customers argue over who is responsible for online account hacks.

Last year a Michigan court found in favour of Experi-Metal in its $560,000 cyber-heist suit against Comerica Bank, concluding that the provider should have done a better job of picking up the fraudulent transactions.

This contrasted with an earlier decision in Maine, where the presiding magistrate ruled that Ocean Bank was not responsible for the loss of around $345,000 from a business customer account following a similar cyber-attack.

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