T-Mobile Moves to Dismiss Credit Union’s SIM-Swap Claims Under EFTA

The Michigan First Credit Union has no right to “indemnification or contribution” from T-Mobile “for liabilities Congress imposed on financial institutions for unauthorized bank transfers affecting their banking customers,” said T-Mobile in a motion to dismiss Monday (docket 2:22-cv-13159) in U.S. District Court for Eastern Michigan in Detroit. Financial institutions across the U.S. are being forced under the Electronic Funds Transfer Act (EFTA) to bear the damages associated with T-Mobile’s failure to stop SIM-swap fraudsters from draining the bank accounts of their common customers, alleges First Michigan’s class action (see 2301030048). T-Mobile is unfairly leaving the banks on the hook for reimbursing customers for their losses, as it's required to do under the EFTA. The complaint also alleges T-Mobile violated the Federal Communications Act by failing to protect customers’ confidential information. Michigan First “fails to state a claim for indemnification or contribution for its liability under the EFTA because the EFTA does not provide for those remedies,” said the carrier. Michigan First also “does not allege facts plausibly supporting T-Mobile’s supposed liability,” it said. Its “barebones” complaint doesn't explain how T-Mobile’s purported violation of the FCA “resulted in customers’ losses from Michigan First’s bank accounts,” it said. The credit union relies on “hypotheticals,” and it “mischaracterizes” carriers’ consumer-protection obligations under the FCA, it said. Michigan First also fails to allege facts “as to why T-Mobile should bear responsibility for hackers accessing Michigan First’s secure banking platform to perform unauthorized banking transactions,” it said.