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ACH Fraud Suits

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I know there have been lawsuits against banks due to fraud involving unauthorized ACH debits on business accounts. What is the status of those suits?

There are only a couple of decisions so far, and they have gone both ways. In Maine, Ocean Bank appears to be the "first round" winner in a suit brought in 2009 by its customer, Patco, over nearly $600,000 in fraudulent transfers out of Patco's account. In Michigan, however, a state court ruled that Comerica Bank is liable for $560,000 in losses sustained by Experi-Metal, Inc.

Both those cases were tried in state courts, and could be appealed, so it's impossible to say that the last word has been said on them. Neither case, even if not appealed, would qualify as a precedent affecting banks throughout the country. And outcomes could be different if cases are brought for losses sustained after the new expanded regulatory guidance on customer authentication.

Each of those state court decisions was reported in BankersOnline's weekly Tech Talk briefing. You can subscribe HERE.

First published on 8/29/11

First published on 08/29/2011

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