Large-scale compromises of computer data network systems, particularly related to the banking and financial industry, are leading to unique and unprecedented litigation of complex commercial matters. Given the wide-ranging cyber security and identity theft issues involved, claims are emerging. Liability may ultimately depend on where in the long chain of electronic transactions a breakdown occurred, regardless of whether the best available technology and cyber security had been implemented in the computer data network.
As technology and cyber security advances, fraudsters are developing new, innovative methods to pilfer funds from innocent banking and financial institution customer accounts. As a result, financial institutions are ultimately initiating litigation to recoup the large-scale losses resulting from the mandatory reimbursements made to their account holders. Fraudsters have historically made purchases with illegally obtained credit card account numbers, but a recent trend shows that fraudsters are gaining access to Automated Teller Machine (“ATM”) and Personal Identification Number (“PIN”) Debit Card account information, allowing direct access to cash accounts. Unlike credit card fraud, withdrawing funds directly from customer cash accounts obviates the need to sell illegally purchased items with stolen credit card information to realize the cash benefits of the fraud. Direct access to cash accounts can lead to rapid withdrawal of a substantial amount of funds in relatively short periods of time.
