Answer:
Not necessarily. Due to sweeping frauds involving account takeovers over the years, many banks have been held responsible for losses resulting from fraudulent wires. Contracts alone don’t protect a bank from losses, even if a business uses poor judgment on its own internal controls. The FFIEC’s Supplemental Guidance to Authentication in an Internet Banking Environment requires banks to understand what is normal for a customer, and what is not, and take appropriate actions.
Additionally, many insurance companies now have minimum security standards regarding wire transfers; if your bank fails to meet those standards, the insurance company will not cover claims of loss. And now we’re contending with even more sophisticated scams, like business email compromise, where the wire request will be coming from a legitimate customer’s email but the customer didn’t send the request.
Your bank should be aware of the types of frauds that exist, and ensure you have security provisions that address each unique form of fraud to reduce not only your exposure, but also that of your customer.
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