When a person perpetrates a fraud on a bank account, what is the limit of liability for the account holder? The complaint for this class action alleges that TD Bank, NA’s refusal to count a transaction as fraudulent violates both the Electronic Funds Transfer Act (EFTA) and the bank’s own agreements.
Plaintiff Ludmila Nelipa has an account with TD Bank. On October 22, 2020, she received a text message that was supposedly from TD Bank’s Fraud Protection Department, asking about a $450 charge related to a Walmart purchase. Shortly after, she received a call, also supposedly from the bank’s Fraud Prevention Department.
The text and call were the beginning of the actual fraud, however, with the fraudster spoofing the phone number to make it appear it was from TD Bank.
The means for the fraud was a service called Zelle that allows an account holder to transmit money to another party’s bank account, identified only by the other party’s cell phone number or e-mail address. Upon receiving such a request, TD Bank sends automated texts to the account holder, asking for confirmation of the transaction.
The fraudster initiated transfers to an account named Rev Code, telling Nelipa that the request for confirmations for payments to Rev Code were to confirm a “reversal code” for the fake fraudulent transactions.
He was thus able to steal $2,500 from Nelipa’s account. He told her that her account would be frozen and that she would receive a new card in a few days. When no card arrived, Nelipa called the bank. On November 2, 2020, Nelipa filed a police report.
However, the complaint claims, the bank said Nelipa had confirmed the transfers. It did not send her an explanation of the bank’s findings or her right to request reproductions of documents.
The complaint quotes the Account Agreement as stating, “If you notify us within two (2) Business Days after you learn of the loss or theft of your Card or PIN, you can lose no more than $50 if someone uses your Card or PIN without your permission.” If the notification does not come within two days, it states, “and we can prove we could have prevented someone from using your Card and/or PIN without your permission if you had told us, you could lose as much as $500…”
EFTA limits the amount of liability for unauthorized transfers to the lesser of $50 or the amount of the transfers. The complaint says, “Thus the consumer’s liability for unauthorized use is generally capped at a maximum of $50 for unauthorized transfers.”
The complaint also quotes an official interpretation from the Consumer Financial Protection Bureau defining the term “unauthorized electronic fund transfer.”
The classes defined for this action are the EFTA Excess Consumer Liability Class, the Breach of Contract Class, and the EFTA Failure to Provide Notice Class. For the full definitions of these classes, see the complaint linked below, pages 9-11.
Article Type: LawsuitTopic: Fraud
Most Recent Case Event
TD Bank Says Fraudulent Transactions Were Authorized Complaint
March 1, 2021
When a person perpetrates a fraud on a bank account, what is the limit of liability for the account holder? The complaint for this class action alleges that TD Bank, NA’s refusal to count a transaction as fraudulent violates both the Electronic Funds Transfer Act (EFTA) and the bank’s own agreements.
TD Bank Says Fraudulent Transactions Were Authorized ComplaintCase Event History
TD Bank Says Fraudulent Transactions Were Authorized Complaint
March 1, 2021
When a person perpetrates a fraud on a bank account, what is the limit of liability for the account holder? The complaint for this class action alleges that TD Bank, NA’s refusal to count a transaction as fraudulent violates both the Electronic Funds Transfer Act (EFTA) and the bank’s own agreements.
TD Bank Says Fraudulent Transactions Were Authorized Complaint