Consumer complaint received 2024-01-16
Company: BMO HARRIS BANK NATIONAL ASSOCIATION
State: WI
Product: Money transfer, virtual currency, or money service
Sub-product: Virtual currency
Issue: Fraud or scam

Complaint:
Commencing on or about XXXX XXXX, I fell victim to a multi-layered scam operation run by XXXX XXXX  XXXX which involved me making deposits for a total amount of XXXX XXXX  from my BMO Harris account to fraudulent investment firm ( s ). 
When determining whats reasonable and fair, we should focus on the issue of liability ; common queries include, but are not limited to, the following ( i ) whether BMO Harris did not take notice of any rule, law, or regulation, and/or possibly missed any material elements of the relevant bylaws or codes of conduct, that may have prevented them from protecting my financial safety ; ( ii ) whether by virtue of BMO Harriss custodianship over my funds or by its control over them, they owed a fiduciary duty to the me and if so, whether that duty was breached ; ( iii ) whether BMO Harris promoted the transaction ( s ) in question despite being aware of the nature of the transaction ( s ) in question ( iv ) whether BMO Harris was in compliance with its own policies and procedures ; ( v ) whether BMO Harris owed duties to myself, what the scope of those duties was, and whether BMO Harris did not uphold those duties ; ( vi ) whether BMO Harriss conduct was unfair ; and ( vii ) whether BMO Harris has within its power the ability to, and should, compensate me for the harm that has befallen me. 
Upon identification of such unusual or suspicious activity, it is crucial that the relevant staff member adequately describe the factors making an activity or transaction suspicious, thoroughly depict the extent and nature of this activity, and properly communicate to the customer that such activity meets the relevant criteria of fraud. In providing its services to a customer, a financial institution is required by law to exercise the care and skill of a diligent, prudent banker. In this case, this means that the payment service provider should not turn a XXXX XXXX  to known facts pointing to a real possibility that their customer is being scammed. In other words, BMO Harris must have had special knowledge of what was occurring or been alerted to a real possibility of fraud taking place. The financial institution must have known or reasonably ought to have known that I was dealing with a scammer. 
Granted, there is room for diversity of view insofar as reasonableness is concerned. Indeed, there is a sense in which the standard of care of the reasonable person involves in its application a subjective element. 
However, it must be remembered that the correct test is always reasonable care in all circumstances, not average care. The fact that most people behave in a certain way may be good evidence that the conduct is reasonable, but this is not necessarily the case. Although reasonableness is a very fluid concept, all of the evidence suggests that BMO Harris did not foresee the fraud and disregarded even the most obvious dangers in this respect.

Situations do tend to repeat themselves and it is advisable to examine previous outcomes to see how the standard of the reasonable person should be applied, and that lessons can be learned from the errors of the past. 
Apropos of the fluidity of the concept of reasonableness, all BMO Harris has done in this regard is set up a dichotomy of having or not having the legal obligation under consideration, however, that does not go one-inch toward explaining why various regulatory authorities, has maintained that financial institutions can, and should, protect consumers using their systems, advanced technologies, and rich experience. 
BMO Harris is obliged to take some action if it is sufficiently aware of a real possibility that a fraud may be being perpetuated. If you don't question its customers instructions or raise the possibility of a scam with the customer in these circumstances, it may be liable if the red flags indicate the customer is : particularly vulnerable, or if the possibility of fraud was serious or real, not just suspected. 
There are some recommendations to organizations for protecting customers from financial harm that might occur as a result of fraud or financial abuse ; and gives guidance on how to recognize customers who might be at risk, how to assess the potential risks to the individual and how to take the necessary actions to prevent or minimize financial harm. 
These recommendations are established as a general principle, the organization should deliver a service that : XXXX ) Takes a proactive approach to minimizing risks, impact, and incidences of financial harm and it sets out systems and tools for the prevention and detection of fraud and financial abuse. As a general point, it says organizations should ensure that all systems are developed using technologies and methodologies that are effective in the prevention of fraud and financial abuse, through authorized and unauthorized payments, thereby minimizing the risk of financial harm to customers. As regards the detection of fraud and financial abuse, it says the organization : A ) should have measures in place across all payment channels and products to detect suspicious transactions or activities that might indicate fraud or financial abuse. It then lists the following examples of suspicious activity on customer accounts : a. multiple chequebooks; b. suddenly increased spending ; XXXX transfers to other accounts ; d. multiple password attempts ; e. logins from new devices, multiple geographical locations ; f. sudden changes to the operation of the account ; Unusual transactions are transactions whose amount, characteristics and frequency bear no relation to the economic activity of the customer, exceed normal market parameters or have no apparent legal justification. 
g. a withdrawal or payment for a large amount ; h. a payment or series of payments to a new payee ; i. financial activity that matches a known method of fraud or financial abuse. 
B ) organizations should have a process in place to ensure that staff makes contact with the customer to verify the financial activity, challenge its authenticity, explain the nature of the suspected or detected fraud, and discuss an appropriate plan of action. 
I am deeply convinced that the disastrous results that I have previously elaborated upon will continue to ensue if no responsibility is adopted by BMO Harris in relation to this matter. I have also thoroughly detailed why they can not simply dismiss this problem by strictly adhering to legal technicalities which, after careful reflection, struck me as being nothing more than self-interest. Indeed, it seems to me utterly unfair to disregard fragile, sensitive, and vulnerable consumers who are afflicted by such allegedly malevolent acts, thereby keeping an unjust status-quo that is corrupting our society at its core.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation