Posts tagged Interactive Communications.
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On May 10, 2018, the Eleventh Circuit Court of Appeals affirmed a Northern District of Georgia decision barring coverage for a loss claimed to arise under a “Computer Fraud” policy issued by Great American Insurance Company to Interactive Communications International, Inc. and HI Technology Corp. Interactive Commc’ns Int’l, Inc. v. Great Am. Ins. Co., No. 17-11712, 2018 WL 2149769 (11th Cir. May 10, 2018).  InComm sells “chits,” each of which has a specific monetary value to consumers who can redeem them by transferring that value to their debit card.  To redeem a chit, a consumer dials a specific 1-800 number and goes through a computerized interactive voice system.  InComm lost $11.4 million when fraudsters manipulated a glitch in the system by placing multiple calls at the same time.  This allowed consumers to redeem chits more than once.  InComm sought coverage for these losses under its “Computer Fraud” policy.

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