What is the liability in likely cases of fraud against the elderly?

A high-profile case in which an estate is seeking millions of dollars from Navy Federal and Wells Fargo is headed for appeal...

A high-profile case in which an estate is seeking millions of dollars from Navy Federal and Wells Fargo is headed for appeal. In re Est. of Cook, No. 1:23-CV-00009, 2023 WL 3467209, at *1 (E.D. Va. May 15, 2023) involves an elderly gentleman who was conned into making a series of wire transfers totaling millions of dollars. Navy Federal Credit Union was so concerned about these transactions that it contacted Adult Protective Services (APS) and urged the member not to make them, but the gentleman refused to listen and the credit union and bank continued to execute the transfers despite the concerns.

The estate argued that Navy Federal and Wells Fargo had a duty to protect the victim in part by deciding to bring its concerns to the attention of protective services. The plaintiff also argued that the financial institutions were negligent in permitting the transactions to go forward. The court rejected both these arguments, noting that “no provision of Section [8.]4A imposes liability on a receiving bank that properly executes a duly authorized wire transfer by the sender.” Id at 2. In addition, nothing in the account language imposed this obligation on the financial institutions.

While I believe this ruling articulates settled law, this area may change gradually over time. Most notably, the federal district court in Washington, D.C. refused to dismiss a lawsuit brought against PNC Bank after it executed a series of transactions requested by an older customer who was conned into making the transfers. This court held that Article 4A, in conjunction with the account agreement, created an implied duty of ordinary care, which the bank may have breached. PNC settled this case. See Bloom v. PNC Bank, N.A., 659 F. Supp. 3d 27 (D.D.C. 2023).

What is the liability in likely cases of fraud against the elderly? -