A federal magistrate judge has ruled against a small business that lost $345,000 in an online bank heist, arguing that the theft largely resulted from its own failure to secure its account credentials, according to published news reports.
Patco Construction Company sued Ocean Bank in 2009 after crooks used malware to siphon about $589,000 out of the company's account. Bank employees managed to recover about $243,000 of the pilfered funds, but held the small business responsible for the remainder. Patco asked a federal judge in Maine to hold the bank accountable for the loss, arguing bank employees should have recognized warning signs that the transactions were fraudulent.
This week's 70-page ruling (PDF) serves as a recommendation and still must be formally adopted by the judge overseeing the case. Still, it could serve as a harbinger of rulings to come. With the wide availability of malware generated from the ZeuS and SpyEye DIY kits, online bank heists have run rampant over the past few years, generating millions of dollars in losses.
Hanging in the balance is whether banks or end users should be on the hook for reimbursing those costs.