Oct 242011
 October 24, 2011  Posted by  Breaches, Court

Martha L. Arias writes:

Banks are not only offering online services but also creating total-online banking divisions; particularly for investments.  Obviously, e-mail is the preferable way of communication between customers and the online bank.  What happens when the online bank reveals customers’ e-mail addresses or financial information? May customers sue and claim damages for violation of privacy, or what cause of action could apply?

In Cherny v. Emigrant Bank, 604 F. Supp. 2d 605 (Dist. Ct. Southern Dist NY), the district court dismissed a lawsuit filed by plaintiff, a customer of an online bank.  Cherny opened a money-market depository account with EmigrantDirect, an online division of Emigrant Bank.   Cherny created an e-mail account specifically to communicate with EmigrantDirect.  Cherny did not publish or provide this e-mail account to any other person.  After Cherny opened his account with EmigrantDirect and provided his e-address, he began experiencing spam at that e-mail address he provided to EmigrantDirect.  Cherny then filed a lawsuit against Emigrant Bank alleging violation of Consumer privacy policy, breach of contract, breach of fiduciary duty, and negligent misrepresentation.  Emigrant Bank moved to dismissed the complaint alleging that (1) no legally cognizable injury was alleged; (2) the pleadings were defective; and (3) the requisite element of the individual claim for relief have not been satisfied.  The court dismissed the complaint.

Read more about the case on iBLS.

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