Class Action Suit Against TD Bank Claims Bank Violates Law by Failing to Reimburse Scam Victims

Terrell Marshall Law Group PLLC, in association with Schlanger Law Group LLP, recently filed a class action lawsuit against TD Bank in which the bank was charged with violating the Federal Electronic Fund Transfer Act (EFTA). The lawsuit–which was filed in federal court in the Eastern District of New York–is demanding actual, statutory, and treble damages for the victims of TD Bank’s unlawful practices.

Bank Scam Targeting TD Bank Customers

The named plaintiffs are TD Bank customers who received fraudulent phone calls from a scammer. Two of the three named plaintiffs received a call from someone who claimed to be a representative from TD Bank. The victims had recognized the phone number as a TD Bank number (now believed to be a caller ID spoof) and trusted the scammer when they claimed that the bank had detected fraudulent activity on the account. The scammer asked the victim to share account information in order to reverse the transaction and protect the account. Once the scammers had this information, they transferred money out of the victims’ accounts. The victims then realized this was a scam and promptly contacted TD Bank and the police.

The third named plaintiff fell victim to a similar scam in which the scammer claimed to be an Amazon customer service representative calling to assist in a refund.

TD Bank Violates the EFTA

The lawsuit is filed against TD Bank for failing to follow several EFTA guidelines meant to protect bank customers from fraud. The EFTA generally protects consumers against unauthorized electronic transfers, requiring the bank to credit back funds that are withdrawn by scammers without the consumer’s permission.

The principal allegation in this case surrounds the bank’s claim that the transaction was authorized because the victim had provided the scammers with information necessary to access the account. TD Bank suggested that by giving this information out, even to a scammer, the victim was authorizing the transaction. However, the Consumer Financial Protection Bureau (CFPB) has clearly stated that a transfer is considered unauthorized when the transfer is “initiated by a person who obtained the access device from the consumer through fraud or robbery.” Official Interpretation of the Regulation E, regarding 12 C.F.R. 1005.2(m).

Because the transactions were not actually authorized, TD Bank is required by the EFTA to refund every victim his or her funds.

A secondary violation by TD bank was its failure to follow EFTA requirements once real fraud had been detected. Banks must provide notice to customers of what material the bank used to determine that the transaction was authorized. Not only did TD Bank fail to supply the victim with this material, but it failed to inform the victim of their right to receive these materials.

Terrell Marshall Law Group and Schlanger Law Group have extensive experience in protecting customers and enforcing state and federal consumer protections, as well as protecting consumers from scammers and fraud. The two law firms have recently teamed up to file several class actions around the country focused on violations of the Electronic Funds Transfer Act that short-changed victims of increasingly preventable identity theft and impersonation scams.

If you believe that you may also be a victim of the scam described above (or a similar scam), please do not hesitate to contact us.