Consumer complaint received 2022-12-05
Company: SILVERGATE CAPITAL CORPORATION
State: TX
Product: Money transfer, virtual currency, or money service
Sub-product: Domestic (US) money transfer
Issue: Fraud or scam

Complaint:
Commencing on or about XX/XX/2022, 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 USD from my Silver Gate bank account to the fraudulent investment firm. 
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 Silver Gate Bank took notice of any rule, law, or regulation, and whether it 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 Silver Gate Banks custodianship over my funds or by its control over them, they owed a fiduciary duty to me and if so, whether that duty was breached ; ( iii ) whether Silver Gate Bank promoted the transactions in question despite being aware of the nature of the transactions ; ( iv ) whether Silver Gate Bank was in compliance with its own policies and procedures ; ( v ) whether Silver Gate Bank owed duties to me, what the scope of those duties was, and whether Silver Gate Bank upheld those duties ; ( vi ) whether Silver Gate Banks conduct was fair ; and ( vii ) whether Silver Gate Bank has within its power the ability to compensate me for the harm that has befallen me.

Upon identification of such unusual or suspicious activity, it is crucial that the relevant staff members 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 silver gate Bank er. In this case, this means that the payment service provider should not turn a blind eye to known facts pointing to a real possibility that their customer is being scammed. In other words, Silver Gate Bank must have had 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 reason 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. 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 common sense is a very fluid concept, all of the evidence suggests that Silver Gate Bank 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.

Silver Gate Banks Position : Silver Gate Bank has continued to refuse to take any responsibility for its part in enabling this crime.

Company response to consumer: Closed with explanation