A 69-year-old Little Rock woman is suing JPMorgan Chase Bank of New York, alleging it failed to stop scam wire transfers that cost her account more than $400,000.
Rebecca Dobbs’ case is one of several by victims who say their banks failed to protect and reimburse them after hackers accessed their accounts.
Victims, however, face a hurdle: The Electronic Funds Transfer Act doesn’t apply to wire transfers. Under the EFTA, consumers are protected in cases of theft and wrongful use of a password or personal identification number as long as customers quickly notify their financial institution.
But hope could be coming for consumers. In January 2024, the New York attorney general’s office sued Citibank of New York, alleging that it misled its customers about their rights after their accounts were hacked and the bank denied reimbursement to the victims of the fraud.
Citibank denied the allegations and asked that the case be dismissed. (Chase Bank is not a defendant in that suit.) Earlier this year, a judge ruled that the EFTA applied to unauthorized wire transfers made through Citi’s consumer accounts and let the lawsuit move forward, according to a news release from the New York attorney general’s office. That case is pending.
Dobbs’ troubles began on Nov. 13, 2023, when she received a cellphone call from a person who claimed he was a Chase Bank employee, according to her lawsuit, which was filed last year in Pulaski County Circuit Court.
Her phone’s caller ID showed “Chase Bank” and listed a phone number connected to the bank, the lawsuit said. The fake employee said that the bank had found a potentially fraudulent transaction in her account. She reviewed her account and discovered it did contain a suspicious transaction.
While on the phone with the scammer, Dobbs used a landline to call the Chase number on her cellphone and the call was answered by Chase Bank. So she believed that the caller was authentic.
But it was a scam.
In a 36-hour period beginning Nov. 13, 2023, 11 wire transfers ranging from $33,000 to $60,000 were made for a loss of $476,000, the lawsuit said.
“At no point did Chase take any action whatsoever to notify the Plaintiff that money was being removed from the Account via multiple wire transfers,” the lawsuit said.
Dobbs called Chase to report the crime and asked that the transactions be canceled and recalled.
But she said that Chase “did virtually nothing to recall the wire transfers.”
Chase said in a letter dated Jan. 17, 2024, that it was able to recover about $35,000, bringing the loss to about $440,000. “While we regret you were a victim of a scam, the wires in question were sent as you instructed,” said the letter, which was included in the case file. “After we approve a wire and release it, we send the funds to the recipient’s bank, and we cannot cancel the wire.”
Dobbs’ suit said she didn’t authorize the transfers. She alleges breach of fiduciary duty and is seeking the money taken from her account plus damages.
“People expect that when they have money in a bank account, that the bank will keep it safe and use reasonable care to make sure that some criminal is not taking action to take money away,” said attorney Todd Turner of Turner & Turner of Arkadelphia, who is representing Dobbs. “And when they find out it happens, they ought to do everything they can to help their customer recover that money.”
A Chase spokesman said he couldn’t comment on the case because it’s in litigation. Wright Lindsey Jennings of Little Rock is representing Chase.
Chase has asked the case be sent to arbitration. Pulaski County Circuit Court Judge Shawn Johnson hadn’t decided on that as of last Monday afternoon.
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