Posted on May 17, 2022
Similarly, the court in Provided. Inches. Co. v. Benchmark Lender (“Benchmark”) agreed that the multi-factor authentication system offered by the bank was commercially reasonable based upon its compliance with the requirements of the Guidance. In this instance, the customer had declined the implementation of additional security procedures, and the customer’s decision to decline these layered security procedures was documented in an email from the customer to the bank. The customer had also agreed in writing to be bound by payment orders, whether or not authorized, made in the customer’s name and accepted by the bank in compliance with the security procedures chosen by customer, whether or not such payment orders were authorized.
Most recently, the court in Rodriguez v. Branch Financial & Faith Co. followed the opinions of the courts in the Benchmark and Patco Construction cases in finding that the multi-factor authentication offered by the bank established a commercially reasonable security procedure in accordance with the requirements of the Supplement. (more…)