Magazine article American Banker

'Screen Scraping' Lawsuit May Clarify Liability Issue

Magazine article American Banker

'Screen Scraping' Lawsuit May Clarify Liability Issue

Article excerpt

Who is liable if someone hacks a bank account that a customer gave permission for an aggregator to access? The customer? The aggregator? The bank?

First Union Corp.'s lawsuit against Secure Commerce Services Inc. may answer those questions, said Catherine Allen, chief executive officer of Banking Industry Technology Secretariat, at a conference this week sponsored by the New York State Banking Department.

First Union filed the suit because Secure Commerce, a provider of bill payment services, does not follow the same strict guidelines on security and safety as banks do in handling customer data, Ms. Allen said. The Princeton, N.J., company is one of a new breed of aggregators, those that do "screen scraping" -- taking customer data from other Web sites to use at their own Web sites.

Because customers grant permission to screen scrapers to collect account-related information, questions of liability become clouded, Ms. Allen said.

First Union's lawsuit, filed late last month, is a part of an industry attempt to develop guidelines in allowing third parties to access proprietary bank data, she said. Banks are responsible for the safety and security of customer information, and "we certainly are legally liable if accounts are breached through our system," she said.

Other companies in the screen-scraping business include VerticalOne and Yodlee. By using account and password information granted to them by consumers, screen scrapers essentially "trick" a bank's mainframe into thinking it is dealing with the consumer, observers said.

First Union's lawsuit could solve a "complicated philosophical issue," said Laura Starita, an analyst at Stamford Conn.-based GartnerGroup.

"You are not allowed under any circumstances to give anybody your password,'' she said, "and yet it is your money, isn't it? …

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