california finance fraud banking
Someone withdrew money from my bank account - what are my rights?
<p>Someone withdrew money from my checking account (in several transactions) without my knowledge or permission.  I was able to see the withdrawal slips online, and my signature was forged.  I reported this to my bank as soon as I found out, and Chase said that the money would be reimbursed once they completed their investigation (within 10 business days).  </p>

<p>It has now been 13 business days, and I have checked on the status twice and was told both times that there had been no status update, and they were unable to provide an updated ETA.</p>

<p>It's a fairly large amount of money, and I need to get it back as soon as possible.  I'm trying to figure out if I have legal footing here.  Does the law protect me from this type of fraud?  And if so, does it require the bank to respond within any particular timeframe?</p>

<p>I live in California.</p>

<p><strong>I reported this to my bank as soon as I found out, and Chase said that the money would be reimbursed once they completed their investigation (within 10 business days).</strong></p>

<p>Chase was likely indicating that the money will be reimbursed within 10 business days of completing their investigation; not 10 business days from the date you told the that someone forged checks on your account. This would make sense when you think about it, as they need to make sure that you were not complicit in the crime (you would be surprised how many people have had someone cash multiple checks from their account only to split the money with them and file a claim for fraudulent transfer/forgery). Further, checks are a negotiable instrument, unlike a credit/debit card, where specific protections exist pursuant to its terms and conditions of use. You have a duty to keep a negotiable instrument safe, and while most banks will reimburse you if it can be established that you had no involvement and you were not grossly negligent in the keeping of the instruments, it is a different animal in and of itself.  </p>

<p><strong>It has now been 13 business days, and I have checked on the status twice and was told both times that there had been no status update, and they were unable to provide an updated ETA.</strong></p>

<p>Unless your bank indicated in the disclosures of the checking account application and acceptance documentation that in the event of a stolen check you will be reimbursed in X amount of days, they have the absolute right to complete their investigation before reimbursing any funds to your account.</p>

<p><strong>It's a fairly large amount of money, and I need to get it back as soon as possible. I'm trying to figure out if I have legal footing here. Does the law protect me from this type of fraud? And if so, does it require the bank to respond within any particular timeframe?</strong></p>

<p>Federal banking regulations provide broad protections to consumers when it comes to fraud involving credit/debit cards, as these are easily stolen from all sorts of means. That said, checks do not carry the same protections, although oftentimes some.  National banks <em>may be</em> required to reimburse customers for forged checks. However, based on individual circumstances, the bank can investigate to determine if the customer is entitled to a reimbursement. There is not duty to reimburse until the investigation is complete. This is why I think you've potentially misconstrued what they said about how long it would take. They cannot promise a time certain when they don't know how long the investigation will take.</p>

<p>Whether the bank is liable for the customer's loss depends on the specific circumstances of the case. Generally, a bank is liable for accepting a check that has been forged, altered, or improperly endorsed. However, if the bank can prove two things — that it accepted the check in good faith and exercised ordinary care and diligence in handling the transaction — it may not be liable.</p>

<p>If your actions — the way the check or checkbook was handled, issued, completed, or made payable — contributed to the making of the forgery, you may be at least partially liable. Generally, the bank will require you to complete an affidavit. It may also request that you file a police report.</p>

<p>** Addition:  I forgot to mention that if the checks were not "cashed" (i.e. filled out to cash or cashed in person), but rather were presented to a 3rd party for payment in receipt of goods or services, you are also going to need to contact those individuals or businesses (their name is on the check) and alert them to the fraud, and allow them to contact their banks, lest you will be assessed fees by them for insufficient funds if your bank later takes the money back as a result of the investigation. </p>

<p>Also, in the event the checks were recreated rather than stolen, or if you don't know exactly how many were stolen, you are going to need to close your account while you wait for the investigation to bear fruit (hopefully), and open a new account, as you now have a duty to account for any and all checks stolen at that event (so, if you know a book is out there and 10 checks have cleared you know there are 15 remaining that the bank is not going to cover if you don't take steps to protect yourself). One would think they've asked you this and have already done something to prevent further checks from coming in, but if not, you need to get on it.  Also, you may want to hire your own investigator if you have the funds to do so. While stolen cards are often strangers, stolen checks (unless it's one washed check) is nearly always someone you know.</p>

<p>You will need to identify a defendant in order to bring any claim.</p>

<p>This isn't something you have a lot of control over - only law enforcement can require the production of surveillance records in the absence of court proceedings (you would otherwise subpoena such records from the bank). You'd need to contact the police in order to have them investigate, and until they identify a suspect, there's no way for you to proceed.</p>

<p>Forgery - <a href="http://www.leginfo.ca.gov/cgi-bin/displaycode?section=pen&amp;group=00001-01000&amp;file=470-483.5" rel="nofollow">California Penal Code 470</a> makes it a crime to commit fraud by forging a signature.</p>

<p>You therefore wouldn't be bringing a claim against the defendant - the State would. I also am not aware of statutory restitution requirements for forgery in California, so you would need to rely on restitution ordered in a sentence passed upon a favorable verdict.</p>

<p>Unfortunately, as far as I know, there's no statutory time limit on the production of records, however intentional and excessive delays may leave the subject of the warrant or subpoena open to action for obstruction.</p>

<p><strong>Disclaimer:</strong> This depends on the jurisdiction, but probably holds in many places. I am not a lawyer licensed to practice in your jurisdiction, or a lawyer. This is just information I picked up here and there, mostly in England.</p>
<p><strong>A bank account is a debt</strong> - you have loaned the bank money, repayable on your demand.</p>
<p>Your account balance is not &quot;your money&quot; - it is an <em>accounting of how much they owe you</em> (or if you have an overdraft, how much you owe them).</p>
<p>It is a debt payable on demand, and a cheque is such a demand.</p>
<p>However a <strong>fraudulent</strong> cheque is not a valid demand, and if the bank pays on a fraudulent cheque, this does not reduce their debt to you.</p>
<blockquote>
<p>&quot;So somebody pretended they were me, asked for money, and you believed them. How is that my problem?&quot;</p>
</blockquote>
<p>It does not matter:</p>
<ul>
<li>how good the forgery was,</li>
<li>how much care they took</li>
<li>whether they were negligent or not</li>
</ul>
<p>It <strong>only</strong> matters if it was a <strong>valid demand</strong> by you, someone authorized by you, or someone you've agreed in your contract that they may take to be authorized.</p>
<p>(This means for example that if you give your credit card to someone, e.g. a child or spouse, then you have authorized them to spend your money, and that's your responsibility; but if your credit card is stolen, then it is not your responsibility.)</p>
<p><strong>Who decides</strong></p>
<p>The court decides, if it goes to court.</p>
<p>Once you have made a valid demand for full payment, you can sue them for the full amount you are owed.</p>
<p>Generally you must say something like this:</p>
<ul>
<li><strong>What you want:</strong> I want such-and-such amount of money</li>
<li><strong>Why you are entitled to it:</strong>  Because that is what the bank owes me, and their accounting is wrong, because that cheque was a forgery.</li>
<li><strong>What you want the court to do:</strong> And I want the court to order them to pay me.</li>
</ul>
<p>You will have to produce evidence. This might be:</p>
<ul>
<li>Your cheque stubs, proving that you didn't write the cheque</li>
<li>Your testimony on oath, swearing that you didn't write or authorize the payment.</li>
<li>Proof you were not in the place where the payment was made.</li>
<li>Some other form of evidence.</li>
</ul>
<p>Once you have provided <em>some</em> evidence (even if it is only your sworn testimony) it is up to the bank to provide their evidence.</p>
<p>The court will decide who they believe, and you will either get your money, or not.</p>
<p><strong>What to do</strong></p>
<p>Probably best to let the bank sort it out. This sort of thing happens a lot, and most big banks are pretty good at sorting it out.</p>
<p>That's good if this is a genuine mistake by the bank (they paid when they shouldn't have), but if you are trying to defraud the bank, then it's bad for you, because they also deal with that a lot.</p>
<p>It will probably take longer than you would like, but if you keep hassling them then they will probably either get to the bottom of it, or give up and reimburse you.</p>
<p>If you suffer any consequential losses, such as from being unable to pay bills and getting penalties, they may well agree to pay those too, provided you are polite but insistent.</p>
<p>But be careful:</p>
<ul>
<li>If it turns out that it was your son or daughter, you may be bringing the criminal law down on them. That's probably not what you want.</li>
<li>So <strong>first be absolutely sure that you don't know who it was</strong>, and that you are happy to do that.</li>
</ul>
