On July 3rd, the First Circuit addressed bank liability when a commercial customer's account is compromised. The customer claimed the bank should bear the losses associated with an account intrusion scheme because the bank's security system was not commercially reasonable under the Uniform Commercial Code. The First Circuit held that when taken as a whole, the bank's security measures were not commercially reasonable. It therefore reinstated the customer's claims and remanded for a determination of whether the customer bears any responsibilities under the UCC and what the customer's damages were. Patco Construction Co., Inc. v. People's United Bank.
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Bank liability for account intrusion schemes
- Winston & Strawn LLP
- USA
- July 9 2012
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Philip I. Weis
Senior Corporate Counsel
Pfizer