Bank Sues Identity Fraud Victim After $800,000 Removed From Its Account

from the how-nice-of-them dept

Recently, we pointed out that what’s often called “identity theft” involving someone falsifying bank account info to take your money is really nothing of the sort, but is instead a bank robbery where the victim gets blamed. This comedy routine makes the point quite clearly:

“They took all the money? That sounds more like a bank robbery.”
“No, no. If only. ‘Cause we could take the hit. No, no. It was actually your identity that was stolen, primarily. It’s a massive pisser for you.”
“But, it’s actually money that’s been taken…”
“From you?”
“Kind of.”
“I don’t know what you want from me other than my commiserations.”
“You see it was your identity. They said they were you!”
“And you believed them?”
“Yes, they stole your identity.”
“Well, I don’t know. I seem to still have my identity, whereas you seem to have lost several thousands of pounds. In light of that, I’m not sure why you think it was my identity that was stolen instead of your money.”

To make this even more ridiculous, there’s now a case where a company who had $800,000 removed from its bank account is being sued by that bank, PlainsCapital, in a proactive attempt by the bank to have a court declare that it is not, in fact, liable for the lost funds. The bank had been able to recover about $600,000 of the money, but the company pointed out that the bank should repay the rest — and the bank responded by filing a lawsuit asking a court to establish that it was not at fault and had taken “commercially reasonable” steps to remain secure. This certainly does seem like one of these insult to injury situations.

Of course, it also seems like a massively poor way to market PlainsCapital. Not only will it not protect your money for you, if your money is taken by fraud from the bank, you may end up in court. That’s not exactly a ringing endorsement of PlainsCapital.

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Companies: plainscapital

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Comments on “Bank Sues Identity Fraud Victim After $800,000 Removed From Its Account”

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Derek Kerton (profile) says:

Re: Soooo

The bank gave money to a con man, and it’s the bank’s fault? Wow?

The bank, in the general case, takes a great deal of responsibility when they hold all that money. They need to have adequate security, and use it well. For example, they require everyone to sign slips all the time. Do they EVER compare the signed slip against your signature on record? Seems like they have the responsibility to do so, implied by the fact they have us sign every time. Otherwise, why even bother.

But in this case, I actually agree with this bank’s lawsuit. They want to clear their name. It seems they have a strong case that the customer divulged their login, perhaps through a Phish scam. The customer seems to be making the counter argument that the bank had inadequate security. I’m not sure I agree.

There will always be a trade-off between bank security and customer convenience. Do I (all of us) want to have to undergo more bank security checks to e-bank just because some customers give away their login and passwords?

Anonymous Coward says:

Re: Re: Soooo

For my bank account, I would avoid just trusting a mere login/password.

For an amount in the $800k range, I would demand something more than that.

But in this case, it appears that the bank did have an extra form of authentication. They only accepted transfer instructions from “registered” computers. I’m guessing that that means an IP address.

Problem was that prior to the fraudulent transfers, the bank accepted a request to add an additional registered computer.

It appears that the request was made by email– which had forged headers…

yogi says:

I knew it

My bank tried to get me to sign for their online banking plan – but when I read through the fine print it clearly stated that the bank will not be responsible in case its security system fails and the money in the account is stolen.

The clerk denied this and kept saying that “everything will be fine” and “the system is great”.Everyone once in a while they try to get me to sign on for this and each time I tell them that their contract absolves them of responsibility they deny it.

I’m not ready to refute the evidence of my eyes so I am politely declining to this day.

Godric says:

Re: Re: I knew it


You are only partly correct. To the evil empires, you are only a $ to be exploited in every way possible. The culture in the banking industry has shifted from “Lets get your money in here to protect it” to a “Squeeze every dollar out of our customers and make them love us for it.”

Danny says:

It's a matter of security....

I would think that if records show that the identity thief was able to get away with the money because the bank didn’t follow its security procedures then there is no question that bank is responsible. People put money in banks because they are told (by banks) that that is a safe and secure place to put your money. At this rate I might have to buy an extra bed so I can put my money in the mattress.

Anonymous Coward says:

Are the Banks Double Dipping?

Doesn’t FDIC insure against robberies?

Robberies and Other Thefts
Stolen funds may be covered by what’s called a banker’s blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank’s customers.

If a third party somehow gains access to your account and transacts business that you would not approve of, you must contact the bank and your local law enforcement authorities, who have jurisdiction over this type of wrongdoing.

•Checking Accounts (including money market deposit accounts)
•Savings Accounts (including passbook accounts)
•Certificates of Deposit
Not FDIC-Insured
•Investments in mutual funds (stock, bond or money market mutual funds), whether purchased from a bank, brokerage or dealer
•Annuities (underwritten by insurance companies, but sold at some banks)
•Stocks, bonds, Treasury securities or other investment products, whether purchased through a bank or a broker/dealer

Chargone (profile) says:

Re: Re: Re: Letter to the Bank

not sure, but i Think he’s claiming that they’re ripping you off with the fees and things.

most banks make most of their money by lending out the money you give them for safe keeping. then they charge you for the privilege.

of course, if you put enough in there, most stop charging you, and they do pay you interest on it (even if it is less than the fees)

actually, several times that.

that’s why a ‘run on the bank’ situation is even Possible. they don’t actually Have all the money they claim to.

one could argue about whether that’s really theft or not, but it’s certainly sneaky. 🙂

Josh in CharlotteNC (profile) says:

All the victim needs to do...

All the victim needs to do is countersue and claim PlainsCapital has somehow infringed a patent and they win by default! From the article:

‘PlainsCapital promptly filed a lawsuit in the U.S. District Court for the Eastern District of Texas’

We all know if you file a patent suit in that particular court you automatically win.

porkster says:

It's not stealing

It’s fraud, an intentional deception made for personal gain.

I found my banks policies very poor when it came to internet/phone banking. I sent them a letter of complaint pointing out there deficiencies (and comparing them other banks). Three things happened:

1. Several accounts were removed from my internet access (mortage, term deposits)
2. The bank changed some policies (not as many as I would have liked)
3. Sent me a letter stating that their security policies were adequate and that any losses would be covered by them (still got this letter)

Richard Corsale (profile) says:

whos at fault?

Hold on just a second.. I cant find who’s actually at fault here? I mean if this was a clear case of the victim handing his info over because he/she was conned, I find it really hard to justify the bank covering their stupidity.

On the other-hand, if it were the fault of the bank in say, security of their server.. or their records were not properly disposed of.. well yeah the bank is liable.

The victim said: “The biggest red flag should have been that the money was being transferred to foreign destinations, which had never happened before with Hillary’s account”.

That said, having transfered large sums of money overseas, I can tell you first hand, it’s handled very differently than domestic transfers. There is no call verification but there is the requirement that you know the pin number. If they had this, the question is how did they get it. If Hillary had declared their account not to wire overseas.. they would never have had an issue. I might be wrong, but my bank made me jump through all sorts of hoops to be able to transfer overseas after 911.

I just never understood the concept of the banks insuring all of their account holders without any assessment of risk or profit from taking that risk. I mean.. look, I’m no fan of the man, but the days of the magic Internet are long gone.

Carrie (user link) says:

This is awful!

It’s such a shame that banks have been able to get away with ruining people’s finances through such shady business practices. Hopefully with all of this recent economic reform, consumers will more likely to be spared.

Sadly, many Americans saddled with pre-reform fees still find themselves deeply in debt. Companies like DebtGuru are thankfully there to help. By working with individuals and banks reduce or eliminate the debts accrued by such transactions, they have already allowed many Americans to get back on their feet. Their credit counselors are very helpful!

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