A year-old state law gives banks, credit unions, investment advisers and other financial institutions more power to stop money scams involving their customers. It’s specifically aimed at protecting the elderly and disabled.
Texas financial institutions can now put a hold on accounts to stop customers from wiring money, making large withdrawals or engaging in other activities that make it appear they are being scammed. They won’t be liable.
Financial institutions are supposed to use their best judgment about when to do this.
How’s it working?
I decided to make an anecdotal study of one bank and how it handles problems that arise when crooks somehow convince their customers to part with their savings.
For The Watchdog’s study, I picked as my test bank one you may have heard of.
The only reason I picked Chase is because it’s the only bank for which in the past year I received more than one fraud complaint from customers. I looked at four complaints from four customers to see how Chase treated them. I looked for lessons in how these four were scammed, and how they could have done things differently.
Does the new law help them? The answer: sometimes.
Case #1 – Fake Microsoft scam
Lino Casas, 76, of Dallas, received a phone call, supposedly from Microsoft. The caller falsely claimed Casas’ computer had been hacked, and his PC was sending pornography to others. He was told this could be fixed, but he needed to go to Sam’s Club and purchase $2,000 worth of gift cards.
“Keep quiet and don’t tell anybody,” he was told.
He bought the cards, and then on the phone he read the numbers on the card to the scammers.
“Front and back” numbers, he told me.
Later, he realized he was scammed and went back to Sam’s to cancel the cards. The cards were destroyed, but by then it was too late. The scammers didn’t need the cards; they had the numbers.
He complained to Chase’s security department since he paid for the purchase with a Chase credit card. Chase told him he was responsible. Plus, the new law doesn’t protect credit card accounts since those are regulated under federal laws.
What Chase says: No one else used his card, so he’s on the hook. Chase spokesman Tom Kelly told me Chase sent him an email alert about suspicious activity (the bank declined a transaction that day), but it took him four hours to call back.
“Please caution readers” he said, never to respond or provide detailed financial information on their computer. Don’t respond to unexpected callers, email or a computer screen popup either.
The victim says of his unknown scammers, “They got me. They got me real good.”
Case #2 – Bank account theft
Verneda Ball, 62, of Wylie, got an alert on her phone that someone made two purchases using her bank funds at a Best Buy in San Antonio for $1,400.
They wiped out her checking account, which led to a wipe-out of her savings account because of overdraft protection.
Chase put a freeze on her account, and she lost access to it for a week. Good for Chase for putting on the freeze.
Then Ball played detective. After getting information from Best Buy, she figured out who stole the money. She tried to get police and Chase interested in making an arrest.
The problem was police said they needed hard proof that her account was tampered with. Chase spokesman Greg Hassell (yes, that’s his real name) said, in this case, the proof didn’t exist because the theft never actually posted to her account. The bank caught it. Good for Chase, again.
But Ball is frustrated that the crook got away.
What Chase says: Ball got all her money back from the bank, including all fees. “Sometimes we are able to cancel the charge for a purchase before it posts to the account,” Hassell explains.
Chase has said it works with law enforcement when contacted by police. Here, there’s no police investigation. Ball says she asked police for help, but she was told to get the proof from Chase. Chase told her she needed a court order.
Sadly, it happened again to Ball a few weeks later. Someone stole $200 from her account, she said. After investigating, Chase restored the loss to her account.
Case #3 – Computer security scam
Christina Ball, 70, of Dallas, (no relation to the Ball in the previous case) received a phone call that she was owed $400 for a refund on her computer service contract. She didn’t know of any contract, but a refund sounded good.
She gave the caller remote access to her computer, and the caller asked her to access her bank account and type in $400. He showed her on her computer a fake bank statement that looked authentic. But it showed $4,000, not $400, in her account.
“You put in $4,000,” the caller said about her supposed mistype. “You need to send us $3,600.”
“It sounded awfully fishy,” she said.
She went to her Chase branch on Coit Road in Richardson and explained what happened. “I think I’ve been scammed,” she announced.
A Chase employee looked at her account and saw nothing amiss. He said nothing about putting a hold on her account, she said.
“I went home believing everything was fine,” she said.
Later, she discovered $2,100 was missing from her account.
“I can’t figure out how they did that. Just by me looking at my account they somehow got all the necessary information to take the money out.”
They’re good. (Or bad, more accurately.)
What Chase says: “Unable to reimburse you because there’s no error on our part…. You unknowingly allowed a third party to access your computer.”
Chase says it offered to freeze her account immediately as the new law permits, but Ball says that’s not true. She says it was only on her third visit to the bank that the offer was made to freeze her funds.
At that time, a Chase employee told her, “Yeah, I’m so sorry. We’re familiar with this [scam]. We see it all the time.”
Bottom line: Ask to put a hold on an account that might be compromised. Ball says on her first visit, she left the bank thinking all was fine. The banker didn’t take advantage of the new law and freeze her account.
Case #4 – Dating service scheme
A Richardson woman, 50, told me she paid $4,500 for a dating service. She asked that her name not be published since neither her family nor friends know she did this.
When she didn’t get the service she was promised, she complained to the Better Business Bureau and Chase Visa, which she used to pay for the service.
She provided solid documentation including her contract and emails showing that she kept trying to use the service. Once the service had her money, they stopped responding to her.
Chase studied the matter and resolved the dispute in her favor. She was awarded a full refund.
Although this isn’t the exact situation the new law is designed to protect, it does show the value of documentation to get results. She believes the documentation she provided carried the day.
Banks getting trained
I spoke with leaders of Texas’ two largest banking associations. Both say that training is done to show bankers their new-found power to block scammers and freeze accounts.
State Rep. Tan Parker, R-Flower Mound, who authored the 2017 Protection of Vulnerable Adults from Financial Exploitation Act, said if more needs to be done to update the law he will introduce another bill because “this is critical for consumers.”
Read the new law: the Protection of Vulnerable Adults from Financial Exploitation Act.
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The Dallas Morning News Watchdog column is the 2019 winner of the top prize for column writing from the National Society of Newspaper Columnists. The contest judge called his winning entries “models of suspenseful storytelling and public service.”
Read his winning columns:
* Helping the widow of Officer J.D. Tippit, the Dallas police officer killed by Lee Harvey Oswald, get buried beside her late husband
* Helping a waitress who was harmed by an unscrupulous used car dealer