Everyday Law

December 11, 2008

Fraudulent transfer of money from YOUR bank account — what to do?

Filed under: Banking — Amy Kleinpeter @ 4:36 pm

This is NOT an easy question, but let me just bring out a couple of points.  Say you check your savings account balance one day online and it is down $10K — and you did NOT authorize a withdrawal.  What do you do to protect yourself?

NOTE: This post is written for California, but it may be applicable in your state.

(1)  Notify your bank — obviously!  Calling is good, but be sure to follow up with something in writing.  If possible, go to your local branch and talk to someone there — have the bank employee fill out a report but also hand them a written explanation yourself.  Be clear that this transfer of money out of your account was NOT authorized.  You need to do this as soon as you find out about the missing money and it is best if it is within 90 days of the unauthorized transfer.

(2)  Gather information — this should be done by your bank, but you do what you can do as well.  For some situations, this is easy — you can maybe find out that your brother forged your name.  However, for most situations, the bank will have much more access to information as to how the transaction occurred and where the money went.  You need to be sure the bank gives you this information.

(3)  Report crime to police — and call to follow up on their investigation.

(4)  Write an OBJECTION to the bank having made the transfer.  This is separate and distinct from your writing the bank to state the transfer was unauthorized and/or fraudulent.  Don’t understand the difference?  Don’t sweat it — just do this!  Write a letter to bank stating you object to the bank having made the transfer.  You want to, in the words of the California Supreme Court “tell the bank expressly that the bank erred in processing the payment orders, or that it is liable for the loss.”  Zengen v. Comerica Bank (2007) 41 Cal.4th 239, 259. I would put in both statements in your letter — the bank erred and the bank is liable for the loss. Who do you send the letter to?  Feel free to call and ask the bank!  You should have some fraud department or some account representative you are dealing with by this point in your dispute.

Please be aware this is just a short summary of some important points to follow if you are ever in the situation of having money stolen from your bank account.  I was talking to a prospective client about this issue yesterday and so went to do the research myself.

Please do NOT think all you need to do is fill out a police report or feel your work is done if someone is arrested and convicted of the theft.  There is a big difference between the government’s goal of getting a criminal off the street and your goal of getting your money back!  Good luck!


1 Comment »

  1. Why aren’t banks secure?
    The whole idea behind keeping your money in a bank vs. in your mattress is that a bank is secure. The banks are FDIC insured for accounts up to $100,000.00 which is higher now due to the economy. The issue these days is that we are getting our identity stolen right at the bank. Here is an example below of one who had over 200 accounts opened up under his name and a huge amount of cash…yes I said cash taken out of his account without having to verify a valid ID.

    What is the answer? Do we keep our money in the mattress? Do we make the courts do something? Tell me your thoughts…..


    Comment by o8justiceforall — December 22, 2008 @ 1:30 pm | Reply

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