The caller was a fraudster. One of the transfers triggered fraud detection systems at the recipient bank, and that bank contacted Eloise’s bank, which asked that the funds not be moved while it investigated the matter. It tried without success to contact Eloise. Several hours later, Eloise called back to learn she had been scammed. Eloise’s bank asked the other bank to return the funds.

Eloise complained that the bank had not taken sufficient steps to recover other payments. She also complained that the bank should have monitored her account more closely for fraud because she had advised it that she was travelling overseas, and if it had done so, it would have detected the fraud. She asked the bank to reimburse the full loss, but the bank declined her request, instead offering her $20,000.

Our investigation

We found the bank had taken sufficient steps to try to recover the funds. It had been successful in recovering one payment worth $6,500 because the recipient’s account was at Eloise’s bank, making the recovery process more straightforward. Other transfers had occurred earlier in the day, and Eloise’s bank had contacted the recipient banks within hours of learning about the fraud. It had possibly been slow to contact one recipient bank, but it was very hard to say what difference earlier contact would have made. Also, Eloise had approved the payments, so the bank was not required to reimburse any of her loss. In our view, the bank’s offer was very reasonable.

We also found nothing to suggest the bank led Eloise to believe her transactions would receive greater scrutiny because she had notified it of her intention to go overseas. Banks encourage such notifications so their fraud detection systems do not falsely flag legitimate transactions as suspicious because they were made in a different country.

Outcome

Eloise accepted the bank's offer.