A recent First Circuit decision is the second recent federal court decision appearing to impose a heavier burden on banks to protect their customers from cyber thieves.
Decided in July, Patco Construction Co. v. Peoples United Bank, 684 F.3d 197 (1st Cir. 2012) addressed whether a bank’s security measures to protect customers from online threats were “commercially reasonable.” In finding that they were not, the First Circuit is creating a trend on the heels of the 2011 decision by the Eastern District of Michigan in Experi-Metal Inc. v. Comerica Bank, No. 09-14890, 2011 WL 2433383 (E.D. Mich. June 13, 2011), which held that a bank’s conduct in a similar circumstances failed to meet the “good faith” standard.
