LATHRUP VILLAGE, Mich.–A court has ruled against Michigan First Credit Union in its bid to seek damages from T-Mobile for losses from so-called SIM swap scams.
The U.S. Court of Appeals for the Sixth Circuit ruled the $1.5-billion Michigan First Credit Union and other financial institutions aren’t entitled to indemnification for fraudulent payments that stemmed from issues on T-Mobile’s network, and T-Mobile isn’t required to provide any contribution to making customers/members whole under the Electronic Fund Transfer Act.
The credit union had been seeking to recover the cost of reimbursing the fees it paid to members after they suffered unauthorized electronic transfers of funds from their accounts due to cellphone scams.
Cybersecurity Expert Has Warning
As CUToday.info earlier reported here, one cybersecurity expert is warning credit unions that fraudsters are transferring victims' phone numbers to their own devices via SIM-swapping. Armed with a stolen SIM, crooks can intercept one-time passcodes (OTPs), which is critical, since OTP authentication is now used during 70% of new financial services account openings.