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Column: Chase let an elderly customer wire more than $600,000 to an overseas scammer

A Chase bank branch
A scammer compelled an 81-year-old woman to wire more than $600,000 overseas within a span of days. Chase bank did little to stop the fraud.
(Associated Press)

Seniors lose more than $600 million a year to fraud, according to the Federal Trade Commission. That’s shocking and heartbreaking.

But what also raises my hackles is when banks turn a blind eye to such activity, authorizing money transfers when it should be obvious that something out of the ordinary is happening.

Lisa Spanierman contacted me recently to relate how her 81-year-old mother got fleeced to the tune of more than $600,000, and how Chase bank did precious little to prevent the theft of much of her life’s savings.

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“It’s mind-numbing,” said Spanierman, 53, a professor of counseling at Arizona State University. “I can almost understand the first time the bank authorized one of these wire transfers. But when it happens again and again, that’s just unbelievable.”

It is. And this isn’t unique to Chase. I’ve heard from a number of people over the years about similar incidents involving elderly relatives and other major banks.

In each case, the bank approves what many observers probably would deem a suspicious transaction and then washes its hands of the problem.

“Chase told me they don’t question their clients,” Spanierman recalled. “But why not? What would it hurt for them to ask more questions and to do something?”

How did an identity thief get $19,000 from a SoCal man’s account? Easy. Chase bank gave it to him in the form of overdraft protection.

She noted that in her three decades as a Chase customer, her mom never once sent a wire transfer before last year, making a sudden flurry of a half-dozen such transactions within a span of two weeks unusual, to say the least.

Spanierman also said her mom’s memory has started to lapse, making it difficult at times for her to explain herself. A bank teller who pressed for details about the wire transfers probably would have seen that something was amiss, Spanierman told me.

“There should have been lots of red flags,” she said. “But the bank ignored them.”

Chase says the bank’s employees followed all required procedures. More on that in a moment.

Spanierman told me she’s had a tough time piecing everything together because of her mom’s memory issues and a reticence to discuss something that seems to have left her mom feeling humiliated.

As best as she can tell, though, Spanierman said it appears her mom fell for a gift-card scam last June, purchasing $2,500 worth of cards for a fraudster. (As I wrote recently, almost any online request for gift cards is bogus, even though many people fall for the ruse.)

“The gift cards were apparently a test,” Spanierman said.

The very next day, she said, the fraudster was back with requests for Spanierman’s mom to invest in a hotel or restaurant in Thailand. It’s unclear, she said, whether the requests were presented as an opportunity or if some sort of threat was involved.

“He got control of my mom’s computer, probably by getting her to download some malware,” Spanierman said. “He saw that she had over $600,000 in her checking account.”

These were inheritance and life insurance funds related to the death of her husband, Spanierman’s stepfather, who died of a brain hemorrhage a year ago.

Regardless of how the con artist motivated Spanierman’s mom, bank records show that she visited a Chase branch on New York’s East Side and wired $45,000 to an address in Bangkok, Thailand. She wired another $45,000 from the same branch four days later.

Two days after that, she wired $300,000 from a different Chase branch. She then returned the same day to the first branch and tried to wire an additional $200,000. Although the transaction was approved, it didn’t go through for some reason.

A week later, Spanierman’s mom arrived at another Chase branch and attempted to once again wire $200,000. This time — finally — a teller was suspicious and refused to send the money.

So Spanierman’s mom returned to the first branch that same day and successfully wired $231,000 to Bangkok.

Despite several signs of suspicious activity, Chase bank did nothing to prevent a scammer from raiding a Southern California couple’s checking account.

Spanierman said the scammer apparently instructed her mom to stay connected with him by phone during each wire transfer. This is a common ploy that not only prevents the victim from calling the police or relatives but also keeps the scammer in the driver’s seat, allowing him to listen in and issue new instructions as needed.

As she related all this to me, Spanierman expressed amazement that, out of a half-dozen wire transfers, only one Chase employee recognized that something seemed amiss and put a stop to things.

All the others apparently had no qualms about allowing an elderly customer to move huge sums of money overseas — something she had never done before in her 30 years as a Chase customer.

Worse, even though one teller spotted seemingly suspicious activity, there apparently was nothing in Chase’s system that flagged the account for other employees.

Think about it: At one branch, a wire transfer was refused. But that very same day, an even larger transaction — $231,000 — was authorized. How is this possible?

Chase didn’t have much to say on that score.

“We know this is difficult for customers and their families,” acknowledged Christina Dello Buono, a spokesperson for the bank.

“That’s why we urge customers to look out for common scams that include out-of-the-ordinary requests to send money to accounts here or abroad to people they may or may not know,” she said, laying the burden of responsibility squarely on customers rather than the corporate custodians of their money.

Dello Buono added that Chase employees are trained “to gather information and ask questions about wire transactions,” and that these procedures were followed with Spanierman’s mom.

Chase says its tellers did their best to confirm that the wire transfers were legitimate, and says Spanierman’s mom insisted that she knew the recipient and all was well.

The bank workers didn’t know the scammer was listening in the whole time.

In any case, Chase’s efforts obviously weren’t good enough, as the loss of more than $600,000 via multiple transactions readily attests.

Spanierman said she’s been told her mom’s money is gone, that the wire transfers can’t be recovered. She accepts that ultimately her mom is to blame for being duped.

Nevertheless, Spanierman lodged a complaint with Chase seeking at least partial restitution of the lost funds, based on the bank’s seeming unwillingness to prevent the fraud. She also reached out to me to shine a spotlight on the matter.

“Any bank employee who took just a minute to ask some questions would have concluded this was a scam,” she said. “But in nearly every case, they didn’t do that. They just helped empty her account.”

These sorts of things happen too frequently to be shrugged off as live-and-learn scenarios. If banks are incapable of implementing safeguards to protect customers, particularly elderly customers, then lawmakers or financial regulators need to step up.

There should be rules making it easier for banks to intervene when faced with suspicious activity — rules that shield banks from liability for blocking some transactions while at the same time ensuring customers aren’t taken advantage of.

If such precautions ended up slowing some valid wire transfers, well, that may be the price we have to pay for having allowed scammers to gain this much access to the banking system.

Saying you’re just respecting your client’s wishes isn’t good enough, not with annual losses running in the hundreds of millions of dollars.

Spanierman told me Chase called her this week to say it’s still looking into her mom’s situation. But she said the bank didn’t indicate it would offer any restitution or implement any changes.

“It seems that they are not interested in understanding the procedural fail,” Spanierman said.

I suspect Chase knows full well how its system lets customers down. They’re just not doing anything about it.

Updates

3:04 p.m. Jan. 14, 2022: This column has been updated to note that Chase said the victim in the scam insisted she knew the recipient of the wire transfers.


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