Would your bank cover the theft or would you have to take the loss?
That’s the question pending right now in a lawsuit between a company in my hometown and its bank after $800,000 went missing.
Here’s what apparently happened.
Hackers used Hillary Machinery Inc.’s online credentials to access the corporate bank account online and wire transfer the money to several overseas accounts. PlainsCapital Bank was able to recover most of the money but couldn’t find $200,000 of it.
The company claims that the bank should replenish the amount into its account because the bank’s security measures for wire transfers were inadequate. The bank claims that the company is at fault and should eat the loss.
The parties are fighting it out in court. Note that once these things hit court, you use a trial lawyer rather than an Internet attorney. Each is a focused niche in the law.
“It is evident that the loss incurred by Hillary Machinery Inc., although regrettable, was not the result of a cyberattack on PlainsCapital Bank.” – Jerry Schaffner, bank president
The company could easily spend $100,000 in legal fees trying to get back the $200,000. So even if the business wins, it still loses.
Although there’s no way to guarantee that this won’t happen to you, if you’re using online banking, there are several key steps that you can take to minimize your risks.
- Limit the number of people who have access to your online banking username and password.
- Change your password frequently. When creating your passwords, use a combination of lower and uppercase letters, numbers, and symbols if possible. Example: QH@2pu!v63f
- Set up e-mail key alerts with your bank that inform you immediately when a transfer or payment over a certain dollar amount (Example: $100) has been made from your account.
- Never click on links in unsolicited e-mails that appear to be from your bank. These may be phishing attempts to obtain your online credentials using a website that looks like your bank but really is designed by scam artists to commit fraud.
When in doubt, talk with your Internet attorney and online security specialists before doing something that could cost you a fortune because of cybertheft.