National attention for corporate account takeover

John Lande Iowa Banking Law Iowa Cybersecurity Law Dickinson Law Des Moines Iowa

Posted on 09/15/2015 at 01:10 PM by John Lande

A topic this blog has frequently discussed was the subject of an NPR national report this morning. In the story, NPR reporter John Ydstie discussed the rules that govern bank liability when an entity, as opposed to an individual, is the victim of cyber theft. This blog has covered this very topic in several posts:

This blog’s prior posts show that a bank has the ability to shift liability for fraud losses to business entities. The rules governing business entity loss require proper documentation and that the bank have a commercially reasonably security procedure. However, this is an opportunity for banks to avoid substantial losses that can occur over a short period of time. NPR's story makes clear that shifting liability to an entity for fraud loss may come as a surprise to most business owners. Banks should heed the warning that the NPR story represents and start to have a conversation with their business clients about the risks their accounts face. This will also enhance your bank's security if your consumers are aware of the threats they face and measures they can take to minimize those threats.

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.  

- John Lande

 

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