JD Supra reported:
In Studco Bldg. Sys. US, LLC v. 1st Advantage Fed. Credit Union, WL 1926747 (2023), a United States District Court Judge held that one of the financial institutions involved in facilitating a BEC payment did not act in a commercially reasonable manner in allowing the transaction to take place. Because the financial institution acted negligently, the victim of the BEC was awarded a judgment of $558,868.71.
The Court noted that, in situations involving potentially fraudulent transfers of customers’ funds, a financial institution exercises appropriate due diligence when it maintains reasonable routines for communicating significant information to the persons conducting the transactions and there is reasonable compliance with those routines. In Studco, the Court held that 1st Advantage did not appropriately monitor its internal fraud warnings and that the bank should have identified certain warning signs about the transactions, including conflicting information about the name of the intended beneficiary and the account holder of the account receiving the fraudulent funds.
Find the original article and read more here.
Enroll in Training Sessions: Last Thursday of Every Month is Training on Frauds and New Scam Alerts and How to Combat
In Studco Bldg. Sys. US, LLC v. 1st Advantage Fed. Credit Union, WL 1926747 (2023), a United States District Court Judge held that one of the financial institutions involved in facilitating a BEC payment did not act in a commercially reasonable manner in allowing the transaction to take place. Because the financial institution acted negligently, the victim of the BEC was awarded a judgment of $558,868.71.
The Court noted that, in situations involving potentially fraudulent transfers of customers’ funds, a financial institution exercises appropriate due diligence when it maintains reasonable routines for communicating significant information to the persons conducting the transactions and there is reasonable compliance with those routines. In Studco, the Court held that 1st Advantage did not appropriately monitor its internal fraud warnings and that the bank should have identified certain warning signs about the transactions, including conflicting information about the name of the intended beneficiary and the account holder of the account receiving the fraudulent funds.
Find the original article and read more here.
Enroll in Training Sessions: Last Thursday of Every Month is Training on Frauds and New Scam Alerts and How to Combat