In a potential watershed case, A Michigan court has found Dallas-based Comerica Bank liable for over half a million dollars in fraudulent wire transfers executed by cyberthieves.
The thieves used stolen electronic banking credentials to wire over $1.9 million out of the accounts of Experi-Metal Inc., a custom metals shop that sells stamped parts to the automotive industry. The bank was able to reverse or otherwise recover $1.34 million from the fraudulent transfers, leaving Experi-Metal with a loss of over $560,000.
Unlike other cases of this type heretofore, the judge has found the bank to be liable for the unrecovered fraudulent transfers, but for reasons not pertaining to the level of their electronic banking security technology. In this case, 97 individual wire transfers were made within a five-hour period, many to bank accounts in Russia and Estonia. The basis of the judges ruling was that the bank had failed to deal with its customer in “good faith”, saying, “A bank dealing fairly with its customer, under these circumstances, would have detected and/or stopped the fraudulent wire activity earlier.” You may read the judge’s entire opinion here.
Though the judge has yet to determine how much Comerica will have to pay, the case has raised eyebrows within the cyberlaw community because of its potential to set a very important precedent. If the ruling stands on appeal, banks will almost certainly act strongly to limit as much as possible their liability in such cases.
InterComputer’s Trusted Banking solution is designed expressly to prevent the compromise of electronic identities and communications between banks and their clients, and insure against losses from cybercrime of any kind.