WHO SUFFERS THE FINANCIAL CONSEQUENCES OF IDENTITY THEFT: THE BANK V. BANKING CUSTOMER?

On September 12, 2018, the Supreme Court of Texas considered whether Francisco Calleja-Ahedo (“Calleja”) or his bank must suffer the financial consequences of identity theft. Calleja sued Compass Bank (the “Bank”) to recover stolen funds after his bank account was drained due to a series of fraudulent transactions. Calleja alleged that the Bank was liable for the financial consequences of the identity theft that took place over a two-year time span. Affirming the decision of the district court, the Supreme Court of Texas overruled a decision by the court of appeals and concluded that Texas law shields the Bank from liability for the losses Calleja’s account sustained due to fraudulent activity.