14 December 2017
visit http://response.ncr.com

Bank settles wire transfer security suit against customer

21 May 2010  |  10430 views  |  0 handshake

PlainsCapital Bank has settled a lawsuit it bought against one of its own business customers after crooks stole over $800,000 from the company's account.

Cybercrooks stole the money from the PlainsCapital account of Texas-based Hillary Machinery last year via ACH and wire transfer.

Around $600,000 was recovered but when Hillary Machinery called on its bank to refund the remaining $200,000 it was hit with a lawsuit asking the court to affirm that security was reasonable and that the transfers were processed in good faith.

The company fought back with its own suit, arguing that the transfers, which went to Europe, should have set off red flags in the bank's fraud detection systems.

The pair have now come to a settlement in what was widely seen as an important test case following a sharp rise in account hijackings of business credentials.

Terms of the settlement have not been disclosed, but it comes just days after the courts threw out a motion by the bank to hold the hearings in private.

Recent research from Guardian Analytics and Ponemon Institute found that the US banking industry is failing to protect its small business customers from a destructive epidemic of cyberfraud that is sweeping the nation.

The research found that 55% of businesses reported experiencing fraud in the last 12 months, with 58% of fraud enabled by online banking activities. Yet, despite the soaring crime rate, 80% of banks failed to catch fraud before funds were transferred out of their institution. In 87% of fraud attacks, the bank was unable to fully recover assets.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

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

Related stories

Banks failing to protect small businesses from cyber crime wave

Banks failing to protect small businesses from cyber crime wave

10 March 2010  |  10855 views  |  0 comments
Heartland settlement with Visa prompts lawsuit against acquiring banks

Heartland settlement with Visa prompts lawsuit against acquiring banks

21 January 2010  |  9315 views  |  0 comments
Restaurants sue POS vendor over data breach

Restaurants sue POS vendor over data breach

26 November 2009  |  11691 views  |  0 comments
Court allows suit against bank for poor online security

Court allows suit against bank for poor online security

08 September 2009  |  12726 views  |  1 comments
Banks face legal challenge to disclose phished account details

Banks face legal challenge to disclose phished account details

26 August 2009  |  5101 views  |  0 comments

Related blogs

Create a blog about this story (membership required)
visit www.niceactimize.comvisit www.atos.netvisit www.response.ncr.com

Top topics

Most viewed Most shared
Saxo Bank's 'Outrageous Prediction': Bitcoin to peak at $60k next year before spectacular crashSaxo Bank's 'Outrageous Prediction': Bitco...
12247 views comments | 7 tweets | 7 linkedin
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
9568 views comments | 16 tweets | 22 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
8192 views comments | 17 tweets | 36 linkedin
Santander UK poaches Barclays innovation chief Michael HarteSantander UK poaches Barclays innovation c...
7405 views comments | 8 tweets | 17 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
7296 views comments | 20 tweets | 11 linkedin

Featured job

Competitive package
New York City, NY - USA

Find your next job