Court Rejects BancorpSouth’s claim customer liable for fraud losses

August 28, 2012

Banking & Finance, Legal Affairs

Labeling it “a very close call,” a U.S. district court has rejected a Mississippi bank’s efforts to have a former commercial customer held liable for losses, damages and legal costs in an ACH and wire fraud case. And one legal expert suggests the case could set a precedent for other similar fraud cases, the website BankSecurity.com reports.

Five months ago, BancorpSouth filed a countersuit against Choice Escrow and Land Title LLC, claiming that company, not the bank, was responsible for a fraudulent wire transfer that in 2010 drained more than $400,000 from Choice’s commercial account. The $14.3 billion bank argued that Missouri-based Choice was responsible for covering the bank’s financial losses and legal expenses related to the case.

But a U.S. district court in Missouri last week dismissed BancorpSouth’s counterclaim against Choice, which filed its original suit against the bank in November 2010. So it now appears the two parties are edging closer to trial.

 

 

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