Consumer complaint received 2023-05-15
Company: ALLY FINANCIAL INC.
State: IL
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Deposits and withdrawals

Complaint:
Dispute case # XXXX with Ally Bank Chicago Police report # XXXX A wrote a check to a home contractor for an unusually large amount of money given my account 's history. The check was stolen from the mail and then " washed ''. It was discovered once the funds had been withdrawn from my account. Judging by the check images, it should have been obvious this check was fradulent with several indicators. 

I reported the fraud just a few days after the check had been deposited. The Fraud Specialist told me I'd receive a call from an Investigator within 1-2 business days and that was 8 days ago. The bank has not reimbursed me for the check that was not properly payable, of which they are responsible to do under the Uniform Commercial Code section 3-406. 

I have called several times seeking information on when the Investigator will call me or when, more importantly, I will be compensated for the fraudulent check the bank allowed to be paid. All I have gotten in response is an ambiguous explanation that the bank the fraudster deposited the check into had recovered partial funds and was investigating. No information on how much was recovered or when the funds would be returned. Even at that, Ally is still responsible, and they are now just giving me no new information and no call from anyone at the bank with further information. 

Ally 's agents have said on more than one call that it is out of their hands now and the other bank is the blocker. That isn't true however under the UCC as this was a check alteration. I am now just getting the run-around and do not feel the bank will handle this on any reasonable timeline in accordance with the UCC. 


XX/XX/XXXX at XXXX - reported the discovery of washed check. The XXXX closed my existing checking account, transferred those funds into a new one. Gave me the dispute # above and told me an Investigator would call within 1-2 business days. 
XX/XX/XXXX at XXXX - Talked to XXXX in Fraud Prevention. Was told they wont be providing a provisional credit as XXXX XXXX was able to partially recover funds and its in their hands now, and that they had up to 180 days to transfer those funds. I instructed her that there are rules XX/XX/XXXX at XXXX - Talked to XXXX in Fraud Prevention . I asked again for any more information on when XXXX XXXX would return funds or how much it the partial recovery was for. He had no further details. He instructed me that escalation process includes leaving VM with supervisor and they would call back within 24-48 hours. XXXX from XX/XX/XXXX call did not instruct me of that or transfer me to that VM. I left a VM with fraud prevention escalations that I would file legal proceedings if funds are not returned within the 10 day window pursuant to UCC code and that the check was not properly payable and so Ally is responsible. 
XX/XX/XXXX at XXXX -Talked to XXXX in fraud prevention. Not helpful at all. Just said the Investigator would need to call me back, no timeline for it. Offered no solutions. It would be up to the investigator on when they were to call me back UCC Section 3-406 Customer Duty of Care Pursuant to UCC Section 4-401, a bank may only process and deduct from a customers account checks that are properly payable. A check containing a forged drawers signature is not, of course, properly payable and can not be charged to the customers account. However, under UCC Section 3-406 a bank paying a forged check drawn on a customers account may be able to escape liability for returning the funds if it can demonstrate that the customer failed to exercise ordinary care and thereby contributed to the forgery or alteration of the instrument.

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