SmithMarco, P.C., Attorneys at Law has recovered nearly $200,000 from Citibank on behalf of an 82-year-old client whose checking and savings accounts were drained by a fraudster.
The victim had banked with Citibank for over 37 years and had never used online banking or wire transfer, according to arbitration findings. She received an e-mail supposedly from Norton that advised her that she had overpaid for her Norton antivirus services and that she was entitled to a credit. The e-mail was later determined to be the work of a fraudster.
The woman, who likely clicked on a response to the e-mail, later spoke to someone called Robert. Robert explained that he needed to take control of her computer so the credit could be applied to her checking account. Overnight, the fraudster emptied her checking and savings accounts. Transactions included both intra and interbank transfers.
The arbitrator’s ruling
The arbitrator in the case wrote: “Citibank seriously erred in not following their own warning lights that allowed the transfer of great sums of money in the wee hours of the morning when it allowed the fraudster to transfer the money from savings to checking and then off to different banks.”
The arbitrator found that Citibank violated both the federal Electronic Funds Transfer Act and state law.
“In allowing this transfer from savings to checking, the bank facilitated this fraud even when they knew there was a high probability of misconduct,” the arbitrator wrote.
The ruling goes on to say: “…fraudsters are constantly coming up with new methods of separating consumers from their money. But our banking system will only function properly when banks utilize the tools available to them and continually develop protocols that protect consumers, and liability for fraudster activity is shared equitably so consumers can continue to maintain confidence in the banking system.”
Damages
Damages totaled $196,497, covering the woman’s financial losses, plus interest, plus an award for emotional harm and pain. The arbitrator awarded treble (triple) damages, under EFTA.