- Key insight: No federal law obligates banks to reimburse customers when they lose their savings to scams. But lawyers for one victim say lenders have a responsibility to step in, and should be held accountable when they don't.
- Supporting data: PNC customer Jeffrey Maas, 76, lost $390,000 in two wire transfers requested by a scammer.
- Expert quote: "This is exactly the kind of pattern the industry knows how to catch." — Ricky Sluder, head of fraud solutions at Quantexa
At what point does it become a bank's responsibility to stop a scam perpetrated against one of its customers?
That's the question at the heart of a lawsuit filed by Jeffrey Maas, a 76-year-old retiree in New Jersey who lost almost $400,000 to fraud. Among the defendants is
The lawsuit faces a major obstacle: In the U.S., federal law does not require banks to reimburse customers who willingly gave their money to scammers.
"Legally in the United States, it's mostly not their responsibility," Ricky Sluder, a former FBI investigator and head of fraud solutions at the anti-money-laundering software company Quantexa, told American Banker. "If a criminal deceives you into pressing that 'Send' button … then you have no federal right to reimbursement at all."
Maas' lawsuit, notably, is being pursued not in federal court, but in the Superior Court of Essex County, New Jersey. The retiree's lawyer, Steve Cohen, says PNC was negligent under a combination of state laws, common law and advisories from the U.S. Treasury Department.
"What we're saying is that the two bankers at PNC had a responsibility to ask some basic questions and slow it down," Cohen told American Banker. "If they had just slowed it down by an hour, it wouldn't have happened."
Last month, the lawsuit cleared a key procedural hurdle — a reminder for U.S. banks that even though federal law is on their side, they are not necessarily in the clear in these cases.
Elder fraud is a
Bank trade groups have warned about the scale of the problem, and have called for national legislation to address it — though not a law requiring reimbursement.
"Congress should consider legislative solutions that empower banks to delay disbursements or hold transactions when they suspect elder financial exploitation," Sam Kunjukunju, a vice president at the American Bankers Association Foundation,
Maas' lawsuit comes at a time when banks are facing growing pressure to tighten their anti-scam controls. Earlier this month, a New York judge
Maas' ordeal began in June 2024, when he received a fake bill for $691.85 for Norton Antivirus protection. He didn't recognize the charge, so he called the customer-service number at the bottom of the email. Unbeknownst to him, he was calling a scammer.
Using falsified PNC bank statements, the fraudster convinced Maas that he had been refunded — but by $300,000 too much. To correct the mistake, Maas would need to purchase $300,000 in gold and deliver it to "PNC."
Soon Maas was at a PNC branch in West Orange, New Jersey, telling a bank worker he wanted to wire $300,000 — almost all the money in his accounts — to a local gold dealer. All the while, he allegedly remained on the phone as the scammer continued to coach him.
According to the lawsuit, the PNC employee asked no questions and sent off the wire transfer. Within hours, Maas picked up $300,000 worth of gold coins from the gold vendor, which he later dropped into the open window of a car sent to his house.
The next day, the scammers managed to swindle another $90,000 out of Maas, using a similar ruse. Once again, according to the lawsuit, a PNC employee approved the wire transfer without asking questions.
PNC declined to comment for this story. But in court documents, the Pittsburgh bank argued that only one set of laws was relevant in this case: the Uniform Commercial Code, which regulates business transactions. And according to PNC, the only thing the Code required of the bank was to do as Maas asked.
"Plaintiff has no viable claim under the UCC because PNC complied with its obligations to send
the two wire transfers at issue," PNC's lawyers wrote.
On that basis, PNC moved to dismiss the lawsuit. But on June 18, Judge Aldo Russo denied that motion, which means the case is moving forward to the discovery phase.
"We never challenged the wire transfer," Cohen said. "Our argument is, it was the training and the interaction. It was everything leading up to the wire transfer where you were negligent."
Maas' lawyers say this negligence occurred on multiple fronts. The bank failed, they say, to adequately train employees to spot the warning signs of a scam; to put in place security measures that would prevent such a scam; and to identify those signs as the scam was in progress.
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Key to Maas' case, Cohen says, is that so much of what he experienced falls under the "red flags" the Treasury Department's Financial Crimes Enforcement Network has urged banks to watch out for.
In 2022, for example, FinCEN sent out an
According to Maas' lawsuit, both these conditions were true in his case. It should be noted, however, that FinCEN advisories do not carry the force of law.
Without speculating about what the PNC employees knew and when, Sluder said the scam Maas faced appeared to be a "textbook" case of the kind of fraud bank employees are typically trained to spot.
"This is exactly the kind of pattern the industry knows how to catch," he said.
The obligation to intervene when a bank customer is being scammed does not exist in U.S. law — but in Sluder's view, it should. In the United Kingdom, he pointed out, banks are required to reimburse scam victims for up to £85,000 in losses, with the cost split evenly between the sending and receiving institutions. None of it is borne by the customer.
"What I find striking about this is that the rest of the world has already answered this question," Sluder said. "We're the only ones right now who are allowing this to be
Likewise, Sluder said, maybe not all banks feel obligated to step in when a scam is underway — but they should. For one thing, the long-term harm to a bank's reputation could cost far more than blocking a single transaction.
"Banks have solutions and systems and processes in place to catch this. They have training for their counter associates," Sluder said. "My question is, why are you doing all that if you're going to do nothing?"
