ACH Fraud Sparks Another Suit

In another round of bank vs. customer, a Maine business has sued its bank, alleging that the institution failed to prevent fraudulent ACH transactions totaling more than $500,000. Patco, a Sanford, Maine-based construction company, had its corporate bank account raided over a six-day period last May by cyber thieves who were able to move over $588,000 to dozens of money mules throughout the country. The business was able to recover only $230,000 of the stolen funds and has sued its bank, Ocean Bank of Portsmouth, NH, for failing to detect and prevent the bogus transfers. "I told them 'We don't want to sue you; can you at least make up part of the loss?'" says Mark Patterson, co-owner of the business. But he describes the bank's response as "This is your problem. It wasn't our firewall that was penetrated." When contacted for comment, Ocean Bank spokesperson David Reid declined, citing confidentiality concerns. This is but the latest example of banks and business customers battling over responsibility for losses resulting from ACH fraud, or corporate account takeover. Most recently, PlainsCapital Bank and Hillary Machinery of Texas settled their lawsuits over a similar dispute. Posted in: Deposit Account Fraud ACH and Wire Fraud