Bank of America Lawsuit Sheds Light on Data Security Issues
Cybercrime is big business. According to a 2014 report released by McAfee and the Center for Strategic and International Studies, cyber attacks account for an estimated $400 billion in annual losses around the world. As consumers, we benefit from Regulation E protection that greatly limits liability in the case of fraud. Businesses that fall prey to cyber predators, however, face bigger hurdles when they attempt to recoup lost funds.
A public hospital in Leavenworth, Washington, is seeing firsthand how tricky the process can be. Earlier this month, Chelan County Hospital No. 1 filed a lawsuit against Bank of America, alleging that negligence on the part of the bank allowed hackers to siphon $1.03 million from hospital payroll accounts in April of 2013. According to the hospital, a Bank of America employee contacted the Chelan County Treasurer’s office to confirm a pending transfer for $603,575. After being told that the charge was not authorized, the employee still processed what was later found to be a fraudulent request.
The outcome of the suit remains to be seen, with Bank of America denying allegations that the events taking place two years ago represent a breach of contract. Still, this scenario serves as a timely – albeit unpleasant – reminder to business owners, IT administrators and operations managers everywhere about the importance of data security. For companies concerned with safeguarding their digital assets, we recommend following QA and workflow precautions such as the ones described in last week’s post for businesses and developers. Taking these steps toward automating case management can help cut down on human error – especially in highly-regulated industries like healthcare and finance.