Defining Reasonable Security

Tracy Kitten writes:

Last month, an appellate court in Boston reversed a lower court’s ruling that favored a bank in a legal dispute over a 2009 account takeover incident (see PATCO ACH Fraud Ruling Reversed.)

Was that appellate ruling fair? Based on the security practices that most banking institutions used in 2009, probably not. The case exemplifies the challenges courts – and the attorneys arguing both sides – face in resolving cases involving ACH and wire fraud. The key issue? How to define “reasonable” security – and how that definition changes over time.

Read more on BankInfoSecurity.

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  1. IA Eng - August 8, 2012

    A few things stay standard ; The meaning of Due Diligence and Due Care. Its a Q&A solution that works. If withdrawals are out of normal and accepted, since the bank customers are protected by FDIC, it’s the responsibility to have safegaurds in place to notice these things. People trust a banking institution to safguard their property.

    On the other hand, if statements show illegal charges in any situation it is the responsibility of the client to report them immediately to the bank and fill out and certify that charges listed are fraudulent and should be investigated.

    Think BIG business. The effort some – Many – Most businesses of all kinds “accept” a level of profit and are comfortable in achieving that number month over month. If this way of doing business works – why change? Even if they have to kick some funds over to cover identity theft or other issue, they are still above water.

    When the situation changes, or new ways of doing bsuiness are introduced, the banks especially are VERY reluctant to do so. It introduces costs and potential new risks and methods to master, which may take many, many years.

    In all events, to save ones’ Assets its best to ensure Quality Asurance, Information Assurance and Change management is in place in order to run an effective organization. You want Security? it requires some pain and anguish – But that effort will bring strength to the organization and along with that brings Trust. In My opinion, the “Trust” has been severly tainted lately, both on the organizational and citizen levels. Its all about making a quick buck, without watching that trainwreck of risk inbound.

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