A wire request for the transfer of funds from Ryder's home line of credit to the Hong Kong account was received by the credit union five days after the initial phone number change.

Upon verification of the signature on the fax and information on Ryder's file, UCSCU called the new phone number to confirm the request with the person who identified himself as Ryder.

The credit union approved and completed the transfer after the person was able to correctly answer a series of security questions, according to the ruling. Two weeks after the transfer, Ryder learned about the transaction when his wife called the credit union to inquire about a loan refinance.

Ryder confirmed and submitted a sworn statement that he never contacted the credit union about the phone number change and did not authorize the wire transfer.

UCSCU said it was not able to recover the $243,000 and submitted a claim to CUMIS. The insurance firm said there was no coverage between the bonding period of February 2007 to February 2008 because new security measures in place during that time required wire transfers to be made through a secure phone number in place for at least 30 days prior to a transfer request.

In its suit against CUMIS, the credit union cited breach of contract. However, Los Angeles Superior Court Judge Terry A. Green ruled for CUMIS saying that UCSCU failed to comply with security measures during the bonding period.

In an appeal, Justice Robert Mallano upheld the ruling, saying the credit union received notification months before the bonding period went into effect in February 2007.

Tom Ott, the credit union's president/CEO, said, “We thought we had coverage and the court thought not, CUNA Mutual thought not,” Ott said. “The only thing I can say about it is we want to congratulate CUNA Mutual and its attorneys on a job well done.”

He added, “Credit unions have difficulty dealing with identify theft. This is what the case was about.”