Consumer complaint received 2018-12-23
Company: PACIFIC WESTERN BANK
State: CA
Product: Checking or savings account
Sub-product: Checking account
Issue: Managing an account
Sub-issue: Funds not handled or disbursed as instructed

Complaint:
Check Fraud Statement XX/XX/2018 Pg. 1 I am XXXX years old and my property management company of 40 years was recently the victim of check fraud resulting in {$39000.00} being stolen from a trust account containing my clients funds. My bank of 37 years, Pacific Western Bank ( previously XXXX XXXX XXXX and XXXX XXXX XXXX  ) erroneously honored the fraudulent checks, which were deposited into the account of XXXX XXXX, an individual unknown to me, at a XXXX XXXX Bank branch in XXXX, CA. 

Despite many clear forgery indications, Pacific Western Bank electronically paid 31 fraudulent checks dated between XX/XX/2018 and XX/XX/2018 and ranging from {$400.00} to {$3200.00}. Pacific Western Bank should have readily identified the fraudulent checks based on many obvious aberrations, including the following examples ( a listing with relevant comments and photocopies of the fraudulent checks are attached ) : Unauthorized and varying signers and signatures Incorrect property management company name. 
Altered check numbers. 
Unsigned check. 
Undated check. 
A check signed on the memo line. 
Two unendorsed checks ( i.e., XXXX and XXXX ) ( note that all subsequent fraudulent checks would have been prevented if the first ( XXXX ) had been stopped by Pacific Western Bank ). 
The first twenty-eight of 31 fraudulent checks have the wrong bank name ( i.e., XXXX XXXX   XXXX  which is the previous bank name before being acquired by Pacific Western ). 
Two fraudulent checks are numbered XXXX and were paid within two months of each other. 
Multiple check numbers and dates are out of sequence. 
Unusual check values and frequencies for the 30-year account duration. 
Inconsistent security feature statements on the fronts and backs of checks. 
Inconsistent typeface, font, word placement, and check number placements. 

During the past 3 months, I have contacted Pacific Western Bank on multiple occasions about recovering the stolen funds. Rather than assisting me with reasonable resolution attempts, Pacific Western Bank is obfuscating their standards-of-care accountability by citing a previously uncommunicated XX/XX/2018 Deposit Account Agreement and Disclosure ( Account Agreement ) and California law. To seek assistance with remedying this situation, I am filing this statement describing the thefts sequence-of-events and Pacific Western Banks unwillingness to acknowledge and resolve their errors. 

Sequence-of-Events - I moved the business office in XX/XX/2018 from XXXX, CA to XXXX, CA and at that time requested that Pacific Western Bank forward bank statements to the new mailing address. However, access to banking records was not received until XX/XX/2018, despite multiple additional attempts to coordinate statement forwarding with Pacific Western Bank. Complicating matters, I was traveling extensively during this period and my bookkeeper was coping with her fathers XXXX diagnosis and treatments. 

Because of the delayed statements, we did not detect the fraudulent checks until XX/XX/2018. That same day, I reported the fraudulent checks to XXXX XXXX at the XXXX branch of Pacific Western Bank. Ms. XXXX assured that she would promptly review the situation and notify me of her findings. Because Pacific Western Bank had not yet contacted me, my bookkeeper visited Ms. XXXX again on XX/XX/2018, but no update was provided other than stating Pacific Western Bank would not file a police report for the thefts. 

Check Fraud Statement XX/XX/2018 Pg. 2 Therefore, my bookkeeper next visited the XXXX County Sheriffs office in XXXX, CA on XX/XX/2018 and reported the theft to Officer XXXX XXXX ( ID # XXXX ), who opened Case No. XXXX ( see attached police report ). The case was then forwarded to Detective XXXX XXXX at the XXXX Police Department ( Case No. XXXX ). The criminal case is still under investigation. 

In addition to the 31 fraudulent checks resulting in the {$39000.00} stolen funds, Pacific Western Bank carelessly paid 4 more fraudulent checks in XX/XX/2018 to XXXX XXXX totaling {$9500.00}, despite already being notified of the active fraud case. Pacific Western Bank reimbursed the 4 fraudulent checks per the attached account adjustment statements, but additionally made accounting errors on the XX/XX/2018 and XX/XX/2018 statements by reporting the same check number and dollar amount. 

Rather than contacting me to address the remaining 31 unresolved fraudulent checks, Pacific Western Bank issued a XX/XX/2018 letter stating that the {$39000.00} stolen funds would not be refunded based on an XX/XX/2018 Account Agreement, which contains a 21-day reporting stipulation for unauthorized transactions ( see attached letter ). Allegedly issued in the midst of paying the obviously fraudulent checks, Pacific Western Bank never notified me of the Account Agreement prior to the XX/XX/2018 letter. Irrespective, the Account Agreement should not apply to 27 of the 31 thefts perpetrated prior to the XX/XX/2018 effective date. Further, the thefts were reported within 21-days of the Account Agreements effective date. Pacific Western Bank appears to be using the questionably timed Account Agreement in an  attempt to confuse and obscure their accountability for first failing to recognize and then paying the fraudulent checks. 

Conclusion - I trusted Pacific Western Bank to protect my account per understood standards-of-care, particularly from such blatantly fraudulent checks. However, Pacific Western Bank failed my trust in the following ways which has inflicted significant financial hardship : Did not diligently forward bank statements despite multiple requests. 
Did not contact me to confirm a clearly unusual check issuing pattern. 
Failed to identify and then paid 31 obviously fraudulent checks. 
Paid 4 more fraudulent checks even after notification funds were later reimbursed. 
Did not report the thefts to police. 
Refuses to accept any accountability or discuss remedies. 

In a final effort to come to a resolution with Pacific Western Bank, we ( the signers on the account ) sat down in a meeting with XXXX XXXX, XXXX branch manager, on XX/XX/2018. We requested that they reconsider reimbursement of the stolen funds based on the multiple, glaring aberrations. We asked the purpose of check security features and signature cards if they were not used to prevent forgeries. We were told that they are only useful in the hands of an actual person and that all checks are passed through an electronic system that reads only routing and account numbers. We were informed that they are trying to dissuade customers from using paper checks, and to transition to electronic funds transfers, and that the system they use is limited to the verification of routing and account numbers. We were not aware that there were any changes or limitations to our banks security measures. We are led to believe that our money is safe with the bank, when in fact they are loosening their security measures considerably without any accountability and leaving us open to loss. 

Since the losses were due entirely to the failure of the bank to recognize blatant signs of fraud and either refuse payment on checks, which on their face were more than suspicious, or contact me to inquire about them, I believe the bank should reimburse the full amount of {$39000.00} stolen from the account

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