Consumer complaint received 2025-02-21 00:00:00
Product: Money transfer, virtual currency, or money service — Mobile or digital wallet
Issue: Fraud or scam — 
Company: BANK OF AMERICA, NATIONAL ASSOCIATION
State: MA

Complaint narrative:
Dear Consumer Financial Protection Bureau, I am filing a formal complaint against Bank of America for its failure to uphold its obligations under Regulation E ( 12 CFR Part 1005 ), which protects consumers from unauthorized electronic fund transfers ( EFTs ). Despite my prompt reporting of fraudulent transactions totaling {$9800.00}, Bank of America has refused to provide reimbursement and has failed to protect me from financial harm. 

On XX/XX/year>, I became a victim of a sophisticated spoofing scam in which fraudsters impersonated Bank of America 's official representatives and deceived me into authorizing transactions under false pretenses. The fraudulent actors utilized methods that made their communications appear legitimate, such as spoofed phone numbers and bank-branded messaging. 
Upon discovering the fraud, I immediately reported the unauthorized transactions the following day to Bank of America on XX/XX/year>, requesting an investigation and reversal under Regulation E, which mandates financial institutions to provide consumer protections for unauthorized electronic transfers. 

Despite clear evidence that I was targeted through deceptive practices and unauthorized account access, Bank of America refused to give me a prompt reimbursement, stating that the transactions were authorized despite the authorization being conducted under false pretenses. The spoofing scam was conducted under the phone number XXXX. This number is an actual certified Bank of America number. Attached below is a log of all of the incoming phone calls that specifically came from this number which states Bank of America as the caller ID. I had believed this was my actual bank calling me on XX/XX/year> due to this number being a certified Bank of America phone number. I had also checked the number prior to accepting the phone call to make sure it was a certified Bank of America approved phone number. Listed below is a list of Regulation E Violations by Bank of America.

1. Under 12 CFR 1005.11, a bank can not refuse reimbursement if the transaction was induced through fraudulent means. My case falls under this category, as I was misled through spoofing and fraudulent impersonation.

Regulation E defines unauthorized transactions as those that occur when the consumer is fraudulently induced into approving a transaction under deceptive circumstances. 
* In this case, I had believed that I was following security instructions from Bank of America, meaning that I did not willingly approve the transactions in a legal sense. 
* Courts and regulatory agencies have ruled that fraudulent inducement is equivalent to an unauthorized transaction because consent obtained through deception is not a legally valid consent. 
* Bank of America failed to recognize the fraud-based nature of my authorization and should have originally classified the transaction as unauthorized. 

Bank of America also failed to Provide Provisional Credit ( Violation of 12 CFR 1005.11 ( c ) ( 2 ) ) * Regulation E states that if a bank can not complete an investigation within 10 business days, they must issue a provisional credit to the customer for the disputed amount.

* Bank of America failed to issue a provisional credit while stillinvestigating, they violated this part of Regulation E.

- As a result, Bank of America wrongfully refused to reimburse my {$9800.00} claim by failing to investigate the fraud properly and by also misclassifying my case as a legitimate authorization instead as a fraud induced unauthorized transaction.

* Under 12 CFR 1005.11, I am entitled a full refund because fraudulent inducement is an unauthorized transaction under Regulation E.

2. Fraudulent Inducement EqualsUnauthorized Transactions - Per 12CFR 1005.2 ( m ), transactions induced by deception, fraud, or misrepresentation must be considered unauthorized and refunded. Under 12 CFR 1005.2 ( m ), fraudulent inducement refers to a situation where a consumer is tricked or misled into authorizing a transaction, making it invalid or unauthorized. This is an important concept under Regulation E, which is used t protect consumers from unauthorized electronic fund transfers ( EFTs ).

Regulation E defines unauthorized transactions under 12 CFR 1005.2 ( m ) as those that occur without the consumer 's consent or authorization, except when the authorization was obtained by fraud or deceit. If a consumer is led to believe that they are authorizing a legitimate transaction but are instead manipulated into doing so, the transaction is considered unauthorized. In my case, the scammer pretended to be from Bank of America and convinced me to authorize the transaction under false pretenses by claiming that the transaction was for security purposes and that Bank of America was protecting my account. Therefore, this transaction was legally unauthorized. 

Bank of America should have had more safety measures put in place to protect their customers from being victims of Bank of Americas inability to provide greater protection in relation to the usage of their leaked/ unprotected phone numbers as well as their phone lines.

* Therefore, under Per 12CFR 1005.2 ( m ), I did not truly authorize the transaction because I was misled into thinking it waslegitimate, making it unauthorized under Regulation E. Because the transaction was fraudulently induced, it falls under 12 CFR 1005.2 ( m ), meaning that Bank of America is legally required to treat it as unauthorized and refund the full amount that I lost.

* In this case, Bank of America failed to recognize that fraudulent inducement means the transaction was not authorized, even if I had physically '' approved '' it at the time.

* Instead of Bank of America properly classifying this as unauthorized due to fraud, Bank of America incorrectly classified it as an authorized transaction due to me physically approving it at the time under both false pretenses and fraud inducement, which is a violation of Regulation E.

* Since the transaction was fraudulently induced, it falls under, 12 CFR 1005.2 ( m ), meaning that Bank of America is legally required to treat it as unauthorized and refund the full amount of money that I lost.

* Fraudulent inducement is when a consumer is tricked into authorizing a transaction by false pretenses. Under 12 CFR g 1005.2 ( m ), such transactions are not considered authorized and must be treated as unauthorized by the financial institution. This means that Bank of America should have refunded my {$9800.00}.

3. Negligence in Preventing Fraud : As a major financial institution, Bank of America has a duty to safeguard its customers from fraud. Given the well-documented rise in spooting scams, the bank failed to implement adequate fraud detection measures to prevent this unauthorized activity from occurring. Bank of America has the ability to detect spoofing scams, yet failed to prevent or flag these fraudulent transactions, despite clear warning signs.

4. Failure to Conduct a ReasonableInvestigation - Per 12 CFR 1005.11 ( c ) ( 4 ), banks are required to fully investigate disputes. Bank of America failed to account for the spoofing scam and fraudulent manipulation involved in this case.

* Bank of America failed to consider the possibility that the authorization was not genuine and that it had been induced by fraud.

* They did not investigate the context of how the transactions were authorized-through a fraudulent phone call-which is crucial in determining whether the transaction was truly authorized. In this case, the scammer used a spoofing technique, which involved impersonating Bank of America to convince me that thetransactions were legitimate. The fact that I was misled by someone who falsely appeared to be my actual bank is a very critical detail that was vastly overlooked by Bank of America.

The Bank of Americas Investigation should have included the following : * They should have reviewed my account activity at the time of the fraud, including the timing of the transactions and any suspicious patterns.

* Identified the spoofing scam, which is a form of fraud that many banks are familiar with and actively monitor. This would have been evidence that I was misled into approving the transactions.

* Contacted me directly to clarify the nature of the transactions, which would have given me the opportunity to explain that I was deceived.

* Properly consider the legal definitions of fraud and authorization, as outlined in Regulation E, which protect consumers from unauthorized transactions due to fraud or deceptive practices.

* Bank of America 's failure to conduct a reasonable investigation into the fraudulent nature of the transaction directly violates 12 CFR 1005.11 ( c ) ( 4 ) .According to the regulation, if Bank of America had conducted a reasonable investigation, they should have identified that the transaction was induced by fraud and therefore unauthorized.

* Bank of America did not follow Regulations E requirements for handling disputes over unauthorized transactions under false pretenses. By failing to investigate the spoofing scam and the fraudulent circumstances surrounding the authorization, I am requesting that Bank of America provides me with a full refund.

I request the CFPB to hold Bank of America accountable for violating Regulation E and failing to protect me as a consumer. I am seeking : Full reimbursement of {$9800.00} under Regulation E, as the transactions were authorized under fraudulent misrepresentation and deception, making them unauthorized under consumer protection laws.

Attached below, is evidence of the phone logs, the police report that I filed, and the Bank of America claim.

Bank of America 's actions in this matter represent a clear violation of my rights under Regulation E, leaving me financially harmed and unprotected. I urge the CFPB to take immediate action to enforce compliance and ensure restitution for my fraudulent loss. I appreciate your attention to this urgent matter and look forward to your prompt response.

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