tl;dr
JPMorgan Chase has refused to reimburse a customer in Utah who fell victim to a $20,000 scam while on vacation. The customer, Kathryn England, was tricked by a scammer pretending to be from the Chase fraud department and was duped into authorizing a wire transfer. Due to a loophole in the Electronic...
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JPMorgan Chase denies reimbursement to customer after $20,000 scam
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JPMorgan Chase has refused to reimburse a customer in Utah who fell victim to a $20,000 scam while on vacation. The customer, Kathryn England, was tricked by a scammer pretending to be from the Chase fraud department and was duped into authorizing a wire transfer. Due to a loophole in the Electronic Fund Transfer Act, Chase denied her claim, highlighting the vulnerability of bank customers to such scams. Limited protections under the law and the convenience of digital banking and wire transfers have made it easier for scammers to exploit unsuspecting individuals, particularly since the pandemic.
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Kathryn England was in Florida when someone supposedly from the “fraud department” at Chase gave her a call, reports the NBC-affiliated news station KSL-TV. The man on the other end told England that someone had wired $20,000 out of her account and to get the money back, she had to follow his instructions. Motivated to get her money back, England followed all of the caller’s instructions, reading several verification codes to him that she received via text message. After a two-hour phone conversation, she was instructed to delete the Chase app from her device and wait for a call back – a phone call that never came.
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After speaking with the real Chase, England discovered she had been duped by a scammer who wired $20,000 out of her account. Chase then denied her claim, as it’s not obligated to cover the loss due to what KSL-TV refers to as a loophole in the Electronic Fund Transfer Act. The law typically protects people whose accounts are hacked or whose cards are stolen, but it does not cover people if they are duped by scammers into authorizing transactions.
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Carla Sanchez-Adams, senior attorney with the National Consumer Law Center, says that due to limited protections in the Electronic Fund Transfer Act, passed in 1978, such cases are now all too common for bank customers, particularly since the pandemic. “It just impacts everyone, and they’re heartbreaking stories because there really are no protections… What happened after 2020 in the pandemic, is that wire transfers are now available through digital banking. Whereas before you used to have to go in person into a branch to initiate large transfers through wire. And now, you know, you can set that up and do it online.”
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