Fraudsters Steal $20,000 from JPMorgan Chase Account Exploiting a “Banking Loophole,” Leaving Customer Without Recourse: Report
In a startling incident, scammers managed to siphon off $20,000 from a JPMorgan Chase account, with the bank refusing to reimburse the customer due to a perceived banking loophole, according to reports.
The victim, Kathryn England, was on vacation in Florida when she received a call from an individual claiming to be from the Chase “fraud department,” as revealed by NBC-affiliated news station KSL-TV.
The caller informed England about the unauthorized transfer of $20,000 from her account and provided instructions on how to recover the funds. Eager to retrieve her money, England complied with the caller’s demands, even reading out several verification codes received via text message during their two-hour conversation. Eventually, she was advised to delete the Chase app from her device and await a callback—an ensuing call that never materialized.
Realizing that something was amiss, England decided to contact Chase after an hour or two of waiting. It was then that she discovered she had fallen victim to a scam and that $20,000 had been wired out of her account.
Unfortunately for England, Chase denied her claim, citing a “loophole” within the Electronic Fund Transfer Act, which released the bank from the obligation to compensate her for the loss, according to KSL-TV.
While the act generally safeguards individuals whose accounts are hacked or cards are stolen, it does not provide protection for those who unknowingly authorize transactions at the behest of scammers.
Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center, revealed that due to limited safeguards under the 1978 Electronic Fund Transfer Act, such instances have become increasingly common among bank customers, a trend that has been exacerbated by the pandemic.
“These cases are just devastating because there are no effective protections… What happened in the pandemic after 2020 is that wire transfers can now be initiated through digital banking. Previously, individuals had to visit a physical branch to conduct such large transfers via wire. But now, you can easily set everything up online,” Sanchez-Adams explained.
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