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Slinde Nelson

Business litigation claims bank’s mishandling of customer account

On Behalf of | Nov 2, 2018 | Business Litigation

Scams against funds held and processed by banking institutions are increasing, including  in Oregon. In one such incident, a computer services company recently filed a multi-count business litigation lawsuit against a savings bank that is alleged to have failed in its duty to protect the company’s cash deposits in the bank. It is alleged that the bank received an email from a purported employee of Precision Computer Services directing the bank to send $67,560 to a bank in another country.

The bank fell prey to the scam and sent the money. The lawsuit alleges several elements of bank negligence in failing to identify the fraudulent nature of the request. The bank ignored the fact that the computer company had no connection to that country and had not sent funds there in the past. Plaintiffs claimed that the bank did not have internalized, industry-recognized protocols for security protection in similar transactions.  

The bank is thus accused of falling below standards developed in the banking industry to protect clients against the very kind of illegal activities that occurred here. It is yet unknown whether the obstacles that the bank fell prey to were known red flags, but the plaintiff computer company alleges that that this was the case. It charges that there were glaring signs that the bank should not have overlooked in its security check. The payment order that the bank honored had not been sent or authorized by Precision.

The email requesting the transfer was sent from a deceptively similar domain name that was owned by a criminal entity. This tactic is known and recognized throughout the banking industry as spoofing. The business litigation lawsuit alleges that the bank failed to follow guidance against fraudulent spoofing schemes that was distributed in 2016 by the U.S. Department of Treasury. These are all issues about which banks in Oregon and elsewhere must be knowledgeable in the digital age of banking.