FRAUD LIABILITY: Is the Genie Out? A recent court case about online banking security is a microcosm of the universe of fraud attacks on corporate accounts, and neither bode well for the industry.(Plugged In)

Byline: Rebecca Sausner

In February 2007, a fraudster armed solely with Indiana residents' Marsha and Michael Shames-Yeakel's username and password was able to gain online access to their Citizens Financial Bank home equity line of credit, and proceeded to steal $26k - wiring it first to Hawaii, then to Austria. Chicago-based Citizens opted not to cover the loss on the grounds that Reg. E doesn't cover credit accounts like HELOCs, and that Reg. Z wouldn't apply because the couple had linked their small business account to the HELOC for payments and made some business purchases with it.

When the Shames-Yeakel's refused to repay the stolen funds, the bank played …