A recent US Court of Appeals decision has caused some concern in banking circles. Here is a blog description with a link to the case, Patco Construction v People’s Bank. Essentially the court held that the business customer’s losses from online fraud had been caused by negligent security practices at the bank, so the bank was liable for them.
As the blog entry (by a noted electronic security expert) points out, while consumers have traditionally been protected in dealings with their banks (so the banks have devised a number of security measures to protect against loss), business clients have . . . [more]