Monday, December 07, 2009

Louisiana Firm Sues Capital One After Losing Thousands in Online Bank Fraud

Brian Krebs writes on Security Fix:

An electronics testing firm in Louisiana is suing its bank, Capital One, alleging that the financial institution was negligent when it failed to stop hackers from transferring nearly $100,000 out of its account earlier this year.

In August, Security Fix wrote about the plight of Baton Rouge-based JM Test Systems, an electronics testing firm that in February lost more than $97,000 from two separate unauthorized bank transfers a week apart.

According to JM Test, Capital One has denied any responsibility for the losses. On Friday, JM Test filed suit in a Louisiana district court, alleging breach of contract and negligence by the bank. The firm says it is still out a total of $89,000, and that it has spent roughly $70,000 investigating and responding to the breaches.

"Capital One was not willing to make good on our losses or attempt any type of settlement," said Happy McKnight, JM Test's controller. "The banks are clearly taking a 'Hey, don't look at me!' stance. It is so sad to wonder how many business failures this type of fraud has caused."

Capital One declined to comment for this story.

More here.


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