by:  Peter J. Gallagher (@pjsgallagher)

Does a bank have a duty to tell authorities that it believes one of the bank's customers is the victim of a scam? In a recent decision — Lucca v. Wells Fargo Bank, N.A. — the Law Division held that banks can report suspected scams (and will generally be shielded from liability against the customer suspected of being scammed if they do) but are not required to do so.

In Lucca, plaintiff made approximately 27 wire transfers totaling roughly $330,000, most of which were sent to Costa Rica to recipients that plaintiff did not know and never met. She did so at the direction of an individual who called her, identified himself as a lawyer, told her that he had a way for her to win some money, and provided her with information about the wire transfers that were part of the alleged money winning proposition. Plaintiff sued her bank and the individual at the bank with whom she interacted in connection with the wire transfers, claiming, among other things, that the bank acted in bad faith when it failed to "disclose the wire transfers to the appropriate authorities." The trial court held a two-day bench trial on this claim and dismissed this claim.

Continue reading “Bank Has No Duty To Report Suspected Scam Perpetrated On Customer” →