PlainsCapital Bank has apparently decided to back down and has reached a settlement with Hillary Machinery over the high profile online banking case involving the cybertheft of almost a million dollars via ACH and wire transfers. From Bank Info Security: Current regulations, including Regulation E and Regulation Z, require financial institutions to reimburse consumers that fall victim to fraud, but financial institutions are not required to do the same for commercial banking customers. The PlainsCapital Bank case is one of at least two similar cases pending in courts across the country, but it is the only case where the bank sued its customer.
So Hillary sued PlainsCapital and ironically, PlainsCapital Bank sued Hillary. As I reported a couple days ago, a judge recently denied a motion by PlainsCapital to go have the case decided by arbitration.
Judge Rejects Arbitration for Online Banking Security Case
Read more: http://pindebit.blogspot.com/2010/05/consumers-need-more-than-reasonable.html#ixzz0oaAeIAQI
Apparently the spectre of a high-profile jury trial to determine if "reasonable security" was in place apparently didn't sit well with the Texas bank...thus they settled. Of course, the terms of the settlement weren't disclosed but I'm guessing that Hillary got their missing $200k back and then some.
Here's more:
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. - Finextra
Jan 28, 2010The bank sought to absolve itself from blame in the heist by stating that the unauthorized wire transfer orders had been placed by someone using valid Internet banking credentials belonging to Hillary Machinery. ...Read more: http://pindebit.blogspot.com/2010/05/kaspersky-co-founder-eugene-kaspersky.html#uds-search-results#ixzz0oa8l5TbyMar 30, 2010In what's shaping up to be a heavyweight legal bout between a bank and its business customer, the attorney for Plano, TX-based Hillary Machinery accuses PlainsCapital Bank of “dodging and weaving” around the fundamental issue of ...
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