Relief hard to come by for Chicago area wire fraud scam victims
CHICAGO (CBS) -- Thousands of dollars transferred out of bank accounts in minutes. We've told you about this trick before. Scammers are swindling people in our area, right and left. Getting a refund seems haphazard.
CBS 2's Lauren Victory takes us down the road of some suggested solutions - a story you'll see only on 2.
Saving for a nest egg usually involves hitting the brakes on spending.
Monika Jedrzejek was socking it away to buy a home.
Michele DAmico to start her wardrobe consulting business.
Michael Dermody to retire.
That $100,000 in combined savings was gone in a flash when Jedrzejek, Damico and Dermody got hit in separate wire scams.
"It was emotionally draining. It was physically draining," said Dermody, whose saga CBS 2 profiled in November.
At Salon DJ in the West Loop, $19,000 meant for payroll vanished through a wire. A fake bank employee called to warn Daniel Janicek about fraud on his account. The salon owner was tricked into giving a stranger access to money - so was Seneka Drdak. We covered their wire scam cases along with DAmico's in January.
Drdak, Janicek, Damico, Dermody and Jedrzejek tells us they knew not to give away bank account passwords or social security information but they believed the person on the other end of the phone was a bank employee. All of them tried to stop made-up chaos by answering other questions posed by scammers. All of them fell for a scam.
Problem is, Chase Bank considers providing personal information to be customer consent.
"They said that I authorized the transactions," said Dermody. "They told me numerous times your case is closed. You are closed. You're not getting the money."
If someone steals your debit card and uses it, a law called the Electronic Fund Transfer Act requires a financial institution to investigate. If the charge is confirmed to be fraudulent, you get reimbursed.
"It provides important protections against unauthorized charges and errors on credit cards, bank accounts, payment apps," said Rachel Gittleman who works as a banking safety advocate for the Consumer Federation of America.
Refunds for people tricked into wire transfers are not mandated by the "Electronic Fund Transfer" Act which was written in the 1970's. Legal language would need to be updated says Gittleman who is among a group of consumer advocates pushing to update the law to include reimbursements for wire fraud victims.
Last Spring, the House Financial Services Committee which includes Illinois U.S. Rep. Bill Foster considered pages and pages of testimony about including wire fraud in the law.
"I think that people recognize that there is a germ of a good idea here," said Foster who represents the 11th district that covers several western and northwestern suburbs.
Foster thinks a better solution is to create a system to digitally verify someone's identity – like a mobile driver's license. He said that could stop or at least deter all sorts of online fraud. We asked how that would work specifically in a wire scam.
"If you had, as a condition of opening a bank account, you had to provide a legally traceable, digital identity then you can very rapidly answer the question who is the owner of the bank account that received a wire transfer?" Foster said.
Attorney Carla Sanchez-Adams from the National Consumer Law Center is all for putting some heat on receiving banks (where scam artists route their wires, then cash out and take off).
"We need to do a better job of requiring tracking. So tracking where the money goes," said Sanchez-Adams. "If they [receiving banks] are allowing their customers to use those accounts to receive fraudulently induced payments, aren't investigating, you know, monitoring those accounts to make sure they're not being used for illicit activity, then they're perpetuating fraud."
Those advocacy ideas pave the way to relief for future wire fraud victims. Unfortunately, the people CBS 2 interviewed – who are out tens of thousands of dollars – have little recourse even if they contact a lawyer.
Consumer Law Attorney Taylor Unterberg from Agruss Law Firm says legal disclosures signed by bank customers and gaps in the Electronic Fund Transfer Act lead to a legal dead end for wire scam victims.
"As a last attempt and a desperate attempt, they call us and unfortunately, we're unable to help them and it really breaks my heart," said Unterberg. "Banks don't even have to get creative or smarter to handle things like this. It could be as simple as requiring consumers to go in-person to initiate wire transactions."
Another suggestion: put a 24-hour or 48-hour hold on wires.
Chase representatives wouldn't share any internal system improvements in the works but point us to a recent social media campaign. Chase maintains a special Fraud Awareness page as well. We're told the bank's focus is on education to prevent scams in the first place.
Meantime, only one of the five wire scam victims CBS 2 profiled in recent months is at ease.
"The tension and everything was just released," said Dermody who checked his account one day and was floored to see all $25,000 stolen from him, returned in late January.
"Why it came back? I still don't know!" said Dermody. Chase didn't provide him or us an explanation for why his money was reimbursed (or why others are not being refunded).
Of course, Chase Bank is not the only financial institution with customers that fall victim to wire scams.
The American Bankers Association say more than 2,000 banks are signed on to its "Banks Never Ask That" campaign. The site includes educational videos and even an interactive game called "Scam City" to help educate consumers.
The Federal Trade Commission encourages victims of any type of scam to report it to them.
"We can't resolve your individual report, but we use reports to investigate and bring cases against fraud, scams, and bad business practices," the FTC website says.
