Court Documents Reveal Banks’ Role in Fraud Against Older Consumers

Elderly_Bank_FraudAccording to consumer lawyers and state and federal prosecutors, reputable banks, large and small, across the country facilitate billions of dollars of fraud each year, much of it involving older consumers.

The New York Times reviewed court filings in civil lawsuits brought against Zions Bank of Salt Lake City and First Bank of Delaware, just two of the banks accused of serving as a “gateway between dubious Internet merchants and their marks,” according to the Times.

The documents reveal that the banks, while reaping substantial profits from customer fees, ignored signs of potential fraud and allowed dubious merchants to prey on consumers.

In a typical scenario, the Times describes the case of an 83-year-old man who gave a telemarketer his bank account information in order, he thought, to update his health insurance. Money was withdrawn from his account but the new health insurance card never arrived and he could not secure a refund. Zions Bank did not interact directly with National Health Net Online, the company that called Mr. Koch. The bank made payments through an intermediary, which shared its fees with Zions. Between 2007 and 2009, according to the Times’ examination of court records, Zions allowed about $39 million to be withdrawn from customers’ accounts.

Zions has been sued by several hundred thousand consumers who claim that Zions, in effect, gave “fraudulent marketers direct access to every bank account in the United States.” The United States attorney in Philadelphia sued the First Bank of Delaware in November. Court records claim the bank abetted “fraudulent Internet and telemarketer merchants,” remaining “willfully blind” to the fact that merchants were illegally taking money from customers, including a disproportionate number of seniors.

While consumers of any age can be the targets of unscrupulous marketers, older people are particularly vulnerable, according to the Times, often due to a combination of financial worries, age, and loneliness.





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