ACH Fraud: 1 Year Later

What Results Have Come from Conflicts Between Banks, Businesses?

By Linda McGlasson, Managing Editor

In Rockwall, Texas, a suburb of Dallas, Hi-Line Supply, a business telephone equipment company, is trying to force Community Bank, Inc. into court to settle a liability claim for $50,000 over an alleged incident of corporate account takeover.

By itself, this incident is a footnote among legal disputes. But seen in the context of similar incidents that have swept the country for the past year, the Hi-Line/Community Bank case is the latest in a series of troubling conflicts between banking institutions and business customers.

It's been almost exactly one year since the growing scourge of ACH/wire fraud was exposed by the Federal Deposit Insurance Corporation in a warning about fraudsters using the online channel to prey upon small and medium-sized businesses.

Since then, the industry has seen many incidents and several high-profile cases, including:

Hillary Machinery vs. PlainsCapital Bank - the notorious case of a bank suing its own customer;

Experi-Metal Inc. vs. Comerica Bank - the concurrent case of a customer suing its bank over fraud losses;

PATCO vs. Ocean Bank - one of the more recent conflicts to emerge nationwide, impacting banks and businesses of all sizes.

To read the entire article, click here - http://www.bankinfosecurity.com/articles.php?art_id=2829&rf=2010-08-10-eb