Who is responsible if I am scammed in a wire transaction?
I like to characterize this as “who’s left holding the bag”. And far too often it’s the person who sent the wire who’d left holding the bag.
The reason for that is there are laws that deal with this. In Colorado those laws fall under what we call the Colorado Uniform Commercial Code and these laws were generally written at a time when electronic transfers weren’t really a thing and most things were done on paper.
However, there’s been amendments. As it stands now, if you are an authorized person to tell the bank to wire money to somebody and there’s a mistake, then the bank is not generally responsible because all they are required to do is make sure you are the right person, the person authorized to give them instructions to wire money. If you give them bad information because you were deceived, the law says that that is not the bank’s problem.
Generally, however, it’s really important that you speak to a lawyer even when the bank tells you it’s not their problem, because the bank may not have done everything they should have done in terms of providing security for that transaction.
Now there are oftentimes agreements between customers and banks where banks have to dot the I’s and cross the t’s to make sure they’re sending the money to the person who’s received it. But it’s really up to the customer and the bank to come up with that agreement. If there’s no agreement the default is: if you were authorized to tell the bank to wire money, then the bank’s not going to be responsible if that money is wired to someone who it should not have been wired to.
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More Q&As on this Topic:
- What is wire fraud?
- Who is responsible if I am scammed in a wire transaction?
- Why has there been an acceleration of wire fraud?
- How can a bank be held responsible in a wire fraud case?
- What are the risks of wire transfers?
- What are banks obligated to do in Colorado in a wire fraud case?
- Do banks have a responsibility to try to interevene in potential wire fraud?
- What are banks’ obligations in wire fraud cases?