Bank Agrees to Reimburse Hacking Victim $300K in Precedent-Setting Case

In a case watched closely by banks and their commercial customers, a financial institution in Maine has agreed to reimburse a construction company $345,000 that was lost to hackers after a court ruled that the bank’s security practices were “commercially unreasonable.”

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People’s United Bank has agreed to pay Patco Construction Company all the money it lost to hackers in 2009, plus about $45,000 in interest, after intruders installed malware on Patco’s computers and stole its banking credentials to siphon money from its account.

Although the UCC places some burden on the customer to “exercise ordering care,” the court found that it was unclear what obligations a customer had when the bank’s security system was found to be commercially unreasonable.

How much does your CU have to lose for not taking the right steps to protect your members?