The funds were taken through four transactions by three merchants using third-party payment services like PayPal and Venmo. Less than 36 hours after he realised money had been stolen, Chakinis said he notified Wells Fargo. — Image by rawpixel.com on Freepik
Earlier this year, exactly US$5,749.60 (RM26,145) was stolen from the Wells Fargo bank account of Michael Chakinis, a 23-year-old process engineer new to the Boise area.
The funds were taken through four transactions by three merchants using third-party payment services like PayPal and Venmo. Less than 36 hours after he realised money had been stolen, Chakinis said he notified Wells Fargo.
Three months later, the bank denied his reimbursement requests and dropped its fraud investigation. That decision turned Chakinis’s story into one shared by many account holders who are left to fend for themselves by banks that say they aren’t legally required to offset thefts carried out through third-party payment services.
“If you think about how many people this is happening to besides me every single day, it’s got to be insane,” Chakinis told the Idaho Statesman by phone. “I don’t think the bank anticipated that I wouldn’t give up after three months. ... At the end of the day, I’m just going to continue until the money’s back in my account, no matter what.”
Wells Fargo declined to answer Idaho Statesman questions about Chakinis’s case or his allegations.
“When a customer files a fraud or non-fraud claim, we follow the applicable laws based on the facts of their situation,” the bank said in an emailed statement. “We also will review to determine if there are other factors that would warrant a reimbursement. Each situation is unique, and while we are not able to share details about specific customers, our review may determine reimbursement is appropriate based on the situation or information provided.”
A Boise police investigator said it is hard for customers with claims like Chakinis’s to win a one-on-one battle with a bank. But Chakinis was insistent. The police investigator suggested another way to fight.
Wells clears payments to Venmo, PayPal, Zelle
At first, Chakinis was encouraged by Wells’ response to his claims.
“They said, ‘Oh, we’re gonna work with you, we’ll work with the police’,” he said.
In the first week of April, the four transactions had been cleared by Wells Fargo through three payment services: Venmo (US$2,000/RM9,100), PayPal (US$1,749.60/RM7,961) and Zelle (two transactions of US$1,000/RM4,550 each).
Chakinis reported the fraudulent transactions to Wells Fargo and filed claims for US$3,749.60 (RM17,061), US$1,000 (RM4,550) and US$1,000 (RM4,550).
He said he was told later that his claim went to an overseas agent, who conducted an investigation that resulted in the bank’s rejection of the initial claim, according to Chakinis. He said Wells Fargo “gave no answer about why the initial claims were handled overseas”. But the use of an overseas agent would later become a problem for police.
A call log Chakinis uses to keep a record of his conversations with Wells Fargo shows over 20 hours of phone calls between the start of April and early June. The bank’s responses to his reimbursement requests have been the same. Wells Fargo’s position is that all of the liability is on the customer when the fraud occurs through third-party payment services, according to Chakinis.
“That’s not how it’s supposed to be,” Chakinis said.
The regulation that Chakinis said would place liability on Wells Fargo is Regulation E, which is promulgated by the federal Consumer Financial Protection Bureau under the Electronic Fund Transfer Act. It provides certain protections to customers from unauthorised account activity. As long as unauthorised activity is reported within a bank’s set time period – which for Wells Fargo is within two business days after learning of the theft – Regulation E limits a consumer’s liability to US$50 (RM227).
According to Chakinis, Wells Fargo contends the US$50 (RM227) limit does not apply, because his money was taken through electronic peer-to-peer transactions made through a third-party payment service.
Chakinis is not convinced.
“A lot of people don’t read the long policy lists all the way through, and every little minutiae and every minuscule detail – they don’t know these things,” Chakinis said. “And that sort of gets them out. But I don’t think they’re allowed to do that.”
He contacted the payment services but learned that the only way to recover the charges lost from his account is through the bank.
Some weeks later, the bank informed him that it would not respond to further claims for the money, and that it had ended its investigation.
“So essentially, these fraudsters drain my checking account, and Wells Fargo, a multibillion-dollar company, they have tens if not hundreds of millions of dollars insured to protect consumers, doesn’t want to bite the bullet on this,” Chakinis said.
Chakinis then turned to the federal Consumer Financial Protection Bureau and the nonprofit Better Business Bureau for help. Both contacted Wells Fargo but received “the same response” that Chakinis had received, according to his time log.
Chakinis asks Boise police to investigate
At a lawyer’s recommendation, Chakinis filed a report with the Boise Police Department. But because Wells Fargo handled the claims overseas, and because of the lack of a local suspect, the case was outside of the department’s jurisdiction, according to Boise Police Detective Brad Thorne.
“Unfortunately, (fraud) happens too much,” Thorne told the Statesman by phone. “A lot of times it’s the bigger banks ... they go with the old rules of, if you can’t prove it wasn’t you, or there isn’t enough evidence, then they just won’t repay you.”
“With certain banks, it’s hard to get a hold of anybody anymore,” Thorne said. Customers “have to be really persistent, because they’ve been violated by the suspect, which is an unknown suspect behind a computer, and then their bank isn’t believing them”.
Thorne told Chakinis that the best Chakinis could do was to reach out to the media and tell his story.
Thorne told the Statesman that he could recall at least three cases where news media reached out to banks through which fraud happened, and the banks “decided they had made a mistake”.
“I usually suggest it as a last resort,” Thorne said. “They should provide the bank the opportunity to do the right thing and go through all the right channels. But in the end, if you believe that you’ve been wronged based on the clearly mapped-out regulations that banks are supposed to follow, then a lawsuit or the media or both are the only other ways to go.”
Chakinis went to the media.
The Statesman talked to him, then reached out to Wells Fargo for comment. Less than two weeks later, Chakinis received an email from the bank informing him that the US$3,749.60 (RM17,061) from the payments through Venmo and PayPal had been returned to his account.
The remaining US$2,000 (RM9,100) was not. He said Wells Fargo told him those claims were being handled by a different Wells Fargo department that does not operate under the same policies.
“To me, it’s weird that they can say, ‘Oh, through two different departments, we have two different standards of how we protect our consumers’,” Chakinis said.
Living ‘paycheck to paycheck’
For Chakinis, the loss of funds led to scrimping.
“Since I’m entry level, I’m just barely making ends meet,” Chakinis said. “I mean, everything is so expensive right now. It costs an arm and a leg to work with how much gas is.”
Chakinis said he’s now eating lunch and dinner at his company’s cafeteria because he gets discounted rates as an employee, something that he’d never needed to do before.
“It’s little things like that, I’ve had to change my lifestyle, because there’s such a deep hole in my pocket right now,” Chakinis said. “I’ve had to kind of restructure part of my life because of like, you know, living paycheck to paycheck.”
Chakinis said he plans to seek an order from a small claims court to refund the last US$2,000 (RM9,100).
“Quite frankly, I don’t want to go there, but if I have to I will,” Chakinis said. “I can’t imagine how many people give up. I guess they ran into a customer that doesn’t want to give up.”
Wells Fargo’s email to the Statesman said the bank is working to raise awareness of common scams through its Online Security Center.
Chakinis said he wants to raise awareness too, as his own has been raised by the theft and his fight with the bank to get his money back.
“I didn’t check my bank statement every day. Now I do,” Chakinis said. “Just because I think it can happen anytime. That’s really unfortunate, but it’s the kind of world we live in.” – The Idaho Statesman/Tribune News Service
