THE ISSUE IN HACKING CASE: WHO IS LIABLE?

Suit filed by Tech Valley Communications seeks payment for calls

LARRY RULISON
Section: Business,  Page: C1

Date: Friday, September 28, 2012

ALBANY -- Tech Valley Communications in Albany has lost hundreds of thousands of dollars in revenue -- and possibly more -- due to an apparent hacking of the phone systems of several local companies, including its own customers.


The company has now filed legal papers in federal court in Albany against three local companies -- including Best Cleaners and Lang Media -- arguing that the companies must be held legally responsible for unauthorized calls made through their internal phone systems on the Tech Valley network.


Tech Valley, which has grown rapidly in this area and New England after an infusion of capital from a Boston private equity firm, claims that Lang Media, Best Cleaners and another local company called American Energy Care, have failed to pay more than $350,000 in long-distance charges.


Although on the surface it appears that the companies are delinquent in their payments, lawyers for Tech Valley and the defendants say they are victims of fraud and that someone hacked into their phone systems to make unauthorized calls.


According to the lawsuits, the calls appear to have taken place during a short period in January. A lawyer for Tech Valley said phone hacking is a widespread national problem and current federal law does not provide enough protection for companies like Tech Valley.


That is why the company is suing its own customers. Apparently some had contracts with the company. In other cases, special access codes given to so-called "casual customers" were used to make calls. It is unclear if those codes were provided directly to the companies or if the hackers stole the codes and used the companies to perpetrate the fraud.


"This will be decided as a legal matter in a court of law," said Carolyn Cole, Tech Valley's general counsel.


Cole said she understands that companies like Lang Media have claimed that their systems were hacked to access the Tech Valley voice network, and she has no reason to believe the explanations are fabrications.


But she said the law isn't clear enough on liability in such cases, and so a courtroom is the only option that companies like Tech Valley have to settle such a dispute.


"It's a problem," she said.


Cole wouldn't say if the matter has become the focus of any criminal investigations.


Albany attorney Richard Meyers, who is representing Lang Media, said he has started an investigation into who could have hacked Lang Media's system to make the calls.


"This is a sad thing," Meyers said. "It could happen to anybody."


lrulison@timesunion.com - 518-454-5504 - @larryrulison