Bank Fraud: A Quick Guide for Consumers

As an attorney who has represented consumers in cases against banks for more than 20 years, I’ve seen an unprecedented and startling storm of bank fraud over the last 18 months. 

If your money (or a loved one’s) has seemingly just washed away from your bank account, let’s break down the three primary types of fraud we’re seeing all over SC:

1. Elder Scams: Typically, scammers convince elderly individuals to move their money to a “secure” location, often through a series of deceptive emails, texts, and phone calls. Sometimes, these scams are preceded by “Team Viewer” or other remote apps on the victim’s computer, and often, the money is moved via wire transfers or cash withdrawals (and deposits) into the Crypto kiosks at your local Circle K.
2. Fraudulent Electronic Fund Transfers: From tech scams involving apps like Zelle to simple cases where you may open your statement to find that money has been transferred to parts unknown without consent, these digital heists are becoming increasingly common.
3. Check Washing/Stolen Checks: Old school. Low-tech fraud. Crooks steal (sometimes right from the victim’s mailbox) outbound checks, “wash” off the payee and amount, and insert a new payee (them) and a new amount (big). Then, they cash the altered checks. You find out later when (and if) you review your statements.

Different state and federal laws, including the Electronic Fund Transfer Act (EFTA) and Uniform Commercial Code (UCC), govern these situations. 

These laws often place liability on the banks, IF used effectively. Here’s a quick action plan to put you in the best possible position to recover your losses when (surprise!) the bank doesn’t really want to refund the thousands of dollars that just exited your account:

1. Sound the Alarm: Notify your bank immediately.
2. Put it in Writing: Document everything — many consumer protection laws require written notice.
3. Demand a Refund: Banks are generally liable for fraudulent transactions. So, you can demand a refund.
4. Don’t Accept “No”: Do not accept a “no” response at face value.
5. Follow Up with a Written “Appeal”: If the bank denies the refund request, send a written “appeal” within 10 days, asking for the basis of the denial and demanding a refund.

And one more thing — detection depends on reviewing your statements — often. Sometimes (particularly with small thefts that get bigger over time or washed checks), fraud can be subtle, so it’s important to catch it early because the clock is ticking.

By following these steps, you can navigate bank fraud and aim to recover stolen funds. And if the problem is ever too big to take on, we’re here to help. 

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