Naomi Wolf: Banks Siding Against the Customer in Fraud Cases

[marmar]

from HuffPost:




Like most consumers, I had always assumed that banks and customers are united in wanting to curtail bank fraud. Unfortunately, I have learned that in fact bank fraud is a big and profitable business -- for the banks themselves; and that changes in electronic banking, combined with the power of lobbyists to sustain the status quo that is stacked against ordinary account holders, mean that if consumers' accounts are corrupted, they can face systemic stonewalling by the banks themselves -- and have little recourse.

In 2005 I started to notice irregularities in a checking account I held with WaMu; but the irregularities were ambiguous. I sought at various times over the course of the next two years to go over all my statements -- but had trouble getting all my records from both online banking and from my branch itself. A busy working parent, I was certainly not as proactive as I should have been -- and, like many consumers of bank services, since we had family accounts and two mortgages at WaMu for many years, and had good relationships with our local branch, I also made the mistake of trusting the bank.

I noticed eventually that checkbooks were missing from my home, and finally my accountant got enough of the records to see an unmistakable pattern of fraud, and called my attention to it. I filed a police report and alerted WaMu to the fraud. For months thereafter, as you can see in the lawsuit that attorney David Fish and I have filed against J P Morgan Chase, now owner of WaMu, that is up on TheSmokingGun.com, I complied with what the WaMu bank officials directed me to do -- which was to leave the accounts open so they could investigate, they said, the fraud. If the fraud is reported within six months of confirmation of fraud, it is liable for the loss.

Then the same officials who had directed me to keep the accounts open, disappeared -- systematically, for just over six months. When I sought to talk to the fraud department, I still could not get records -- including my own missing bank statements -- even to see the full extent of my losses. The bank officials who had directed me to keep my accounts open were unavailable at the branch -- over the course of many attempts to speak with them. The police at the Sixth Precinct needed to see the missing documents, but even they could not force WaMu to hand over their -- my -- records. (WaMu's own internal emails cite a $300,000 figure for my loss from fraud -- I still did not have enough of my records to identify the loss. It is illegal, by the way, to withhold from an account holder his or her own records). ..........(more)

The complete piece is at: http://www.huffingtonpost.com/naomi-wolf/post_722_b_691188.html

[Jefferson23]

1. It never seems to freaking end. K&R n/t

[Greyhound]

2. K&R, shocking...

not really, but maybe this will get some small notice.:shrug:
:kick: & R

[dkf]

3. Who in the world leaves large amounts of cash in an account that is being stolen from?

Is this woman crazy? She has online banking and doesn't pull it up to realize there are odd transactions? Were there no out of sequence notifications? Sometimes you just oughta know better.

[xchrom]

4. Recommend

[whistler162]

12. As a example of slipshod journalish.... agreed

At least half the story is missing.

[Better Today]

5. This is why every student should learn how to and the importance of

monthly bank reconciliations. It only takes about 10 minutes. I'm sorry, but I don't have sympathy for folks who lose $300K over the course of time because when they initially thought they saw problems, they ignored or didn't have time to reconcile the account. Ridiculous.

[Raineyb]

7. And this mitigates the banks stonewalling how?

Did you just miss the entire point of the article in order to make a snide comment about the author?

[Lance_Boyle]

8. Bank's stonewalling?

The author is the one who let $300K disappear after she knew there was a problem, then decided to try to make her marked stupidity in the matter into someone else's problem. Author has all the sense and responsibility of a stone wall herself.

[Raineyb]

9. And when she went to the bank to get the information that they refused to release

that's not stonewalling? When banks make it difficult to close an account (as was mentioned in the article in a different case) while the account is robbed that's not stonewalling? You seem to be fixated on the fact that the author kept the account open while completely ignoring the bank's unwillingness to do what was needed to help the police investigate the matter AFTER the person whose name is on the account made it clear that this was something they are pursuing.

All this to do what? Make a gratuitous snark at the author while deliberately missing the point? The point of the article, in case you are having trouble understanding, is that the banks are not helping consumers who are alerting to fraud on their accounts. Yes they can close the accounts (and have to change all their automatic payments as well as shell out money for new checks, the latter being an activity which brings money into the bank yet again) but when they actually pursue the fraud the bank goes out of its way to make sure that the consumer has as little chance of getting a good end for all their trouble and you're fixated on blaming the woman for listening to the damn bank when they suggested she keep the account open?

Way to completely miss the point, no wonder business gets away with so much.

[Better Today]

10. The article clearly states that she thought something was wrong for months before she took action

to find out what was going on. I can't fault the bank for taking no more interest in her account than she did for months. I also can't blame them for not wanting to pay for her accumulated foolishness. I have had similar situations and called the bank immediately upon finding the problem, that month when I did the reconciliations, and they immediately reversed the charges and transferred all my remaining money, except $10, into a new account. The $10 was just so they could locate who was attempting to defraud me and it was also ultimately transferred to the new account. They took the check numbers of all valid checks that I had written and had not yet cleared, and made sure those were honored through the new account.

Now this wasn't WAMU or JPMorgan, but having been an accountant at many businesses over the past 3 decades, I've had to deal with similar problems with many banks.

[Lance_Boyle]

6. Wouldn't you think that whoever committed the fraud, not the bank,

should be liable for the damages? And seriously - this woman let $300K slip away WHILE SHE KNEW THERE WAS A PROBLEM and did nothing to help herself? I'd say she learned a $300K lesson in how not to be an absolute moron. At least I *hope* she learned it. The deep-pockets-regardless-of-who-did-the-wrong lawsuit does not not seem to indicate much in the way of learning.

[northernlights]

11. agreed. seriously....

somebody who was missing $300,000 but was "too busy" to stay on top of it?!?

Cry me a river, lazy fool :nopity:

[ThomCat]

13. Her account was locked so that she could not access or remove her money

but the people committing fraud could, and the bank could still hit her with fees. That was the problem.

And lacking records, that the bank refused to provide, she could not fight the fees and prove that she was not liable.

So, the basic accusation is that the bank took advantage of the fraud and set her up to be the victim of more fraud to get more fees out of her.

Unfortunately, I know for a fact that Telcos do the same thing when billing fraud happens on large corporate accounts. The billing fraud departments are there to hinder the customers and help the Telco milk as much money as possible.

This is the trend in give finance. Fraud is a profit center.

[david13]

14. You are supposed to watch your own money. The bank just holds it for you. dc