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Cyber Risks · Krebs on Security

Court Favors Small Business in eBanking Fraud Case

Summary: A Michigan court ruled Comerica Bank liable for more than $560,000 stolen in a January 2009 cyber heist, after Judge Patrick J. Duggan found the bank failed to act in good faith when it processed 97 fraudulent wire transfers from Experi-Metal Inc.'s account within a few hours. The attack began when an EMI employee entered a one-time passcode on a phishing site imitating Comerica's online banking portal, and the bank did not stop more than a dozen additional fraudulent transfers after it first detected the activity four hours in.

Bottom line: Businesses do not get the legal protections consumers have against cyber theft, so the $560,000 loss sat with the small business until a court shifted it to the bank - and Comerica is appealing. The court's focus on fraud detection mechanisms, not just the token-based security procedure, puts every bank's monitoring of wire activity on the line for the customers it serves.

Read the original at Krebs on Security ↗

Topics
Data Breaches
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