Robert McGarvey reports that a credit union’s lawsuit against Fiserv has been resurrected by a Tennessee court:
The Court of Appeals in Tennessee, in a ruling filed July 3, ruled that a lower court erred when it dismissed a suit filed by Copper Basin Federal Credit Union and CUMIS against Fiserv Inc., wherein the plaintiffs alleged that Fiserv’s negligence allowed a data breach to occur on the Copper Basin FCU computers.
Wrote the court: “Plaintiffs alleged in their complaint that Defendant negligently performed professional services concerning the provision and maintenance of web defense software and that Defendant breached its contractual duty to protect the computer system of Copper Basin Federal Credit Union from computer incursion. For the reasons stated herein, we hold that the complaint alleges sufficient facts to allow the case to proceed, and, therefore, dismissal was in error.”
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In this case, the plaintiffs claim that Fiserv – as part of web defense services it offered them apart from its master contract – failed to activate the anti-virus software Fiserv required the credit union to use. Although the credit union duly paid for the update, they claim that only Fiserv had the login to the account. After the credit union was hacked and more than $500,000 stolen from an account, an employee discovered that Fiserv had failed to activate the software for more than 60 days.