U.S. Banks Profit from Facilitating Fraud against Their Customers
The U.S. Department of Justice is beginning to crack down on banks that help scammers defraud customers.
Banks under scrutiny have not partnered with fraudulent schemes, but rather have facilitated and enabled efforts to cheat Americans out of their money.
Two banks—Zions Bank of Salt Lake City and First Bank of Delaware—have been singled out in lawsuits by federal authorities and a consumer law firm. In both cases, bank officials were accused of allowing shady merchants to illegally withdraw funds from accounts belonging to victims.
Justice Department attorneys are considering civil and criminal actions against numerous banks for allowing tainted money to flow through branches, for failing to safeguard against suspicious merchants, and for originating transactions on behalf of businesses that they know make unauthorized withdrawals from customer accounts, according to The New York Times (NYT).
“You can’t close your eyes anymore to the fraud that you are allowing to happen,” Michael Blume, director of the Consumer Protection Branch at the Justice Department, told the NYT. “Banks are in business to make a profit. Unfortunately, this is a moneymaking operation at consumers’ expense.”
http://www.allgov.com/news/where-is-the-money-going/us-banks-profit-from-facilitating-fraud-against-their-customers-130612?news=850271
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