Supreme Court Says Banks May Have to Compensate Digital Fraud Victims for Due-Diligence Lapses

The Supreme Court has indicated that banks could be required to pay digital fraud victims if a failure of due diligence is established. The bench suggested that lenders classify accounts based on their nature and transaction patterns. It also proposed that institutions use technology, including artificial intelligence, to flag deviations that may signal coercion or fraud. The observations point to a greater onus on financial institutions to detect and prevent suspicious activity.