Q&As

A client (Party B) is owed money by a debtor (Party A). An invoice was sent by Party B, but their emails were hacked and the money owed to Party B was paid to the hacker (Party C). Who is at fault and can Party B recover the funds from Party A?

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Published on LexisPSL on 14/11/2018

The following Corporate Crime Q&A provides comprehensive and up to date legal information covering:

  • A client (Party B) is owed money by a debtor (Party A). An invoice was sent by Party B, but their emails were hacked and the money owed to Party B was paid to the hacker (Party C). Who is at fault and can Party B recover the funds from Party A?
  • Who is at fault?—the hacker
  • Civil proceedings for fraud
  • Can the money be recovered from the debtor?

You may wish to consult the following Q&As which consider similar scenarios:

  1. Where a supplier (B) has emailed an invoice to A for goods supplied by B to A (and which were received by A) but the email was hacked by an unknown third party (C) and B’s bank details for payment were substituted with C’s, such that A pays C and not B, can B recover the invoice sum from A?

  2. A is a customer of supplier B. Where A has mistakenly paid third party C, as a result of C having hacked into B’s records and issued an (false) invoice apparently in the name of B, but payable to C’s account, is B liable to A in damages for the money A paid to C?

Who is at fault?—the hacker

Computer ‘hacking’, as it is often known, is itself a crime (see Practice Note: Computer hacking and misuse under the Computer Misuse Act 1990).

Fraud, where it is perpetrated by means of hacking or hijacking a computer and/or misuse of data is also potentially an offence under criminal law (see Practice Notes: Non-Data Protection Act offences involving the misuse of data and Fraud by false representation

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