State and federal laws prescribe rules for the relationship between a bank and its clients.
These laws protect the consumer against losses from identity theft, and require banks to use due diligence when extending credit. Banks typically cover all losses against identity theft; but what happens if they don’t?
Can You Sue A Bank For Allowing Identity Theft?
Beyond the criminal penalties that may be imposed on the criminal who steals your identity; you may initiate civil proceedings against 3rd party entities. These entities include:
- Credit Card Companies
- Credit Bureaus
- Merchants who process credit card transactions
- Government agencies
- Employers, and
- Any other business that had possession of and may be responsible for the stolen information.
If any party’s negligence contributed to your losses, you may be able recover financial compensation. Liability will depend on the relevant federal and state laws, how much of your personal information was exposed, and other facts of the case.
Consulting a knowledgeable identity theft attorney would help you explore strategies for winning financial compensation.
Common Way’s Identity Theft Occurs At Banks
The profession of identity theft is growing and developing all the time. Several methods of attaining consumers personal information have been discovered. The most successful methods are:
- Protocol failure of fraudulent checks
- Unauthorized bank accounts
- Credit Card breach
- Applying for credit
These methods have been most effective against older consumers who are unfamiliar with technology, or the young consumers who are not careful in their transactions.
Protocol Fraudulent Checks
The bank is responsible for validating your true signature on all checks. The bank needs to verify any address changes when requested to send checks to a different address. State laws protect you for all losses in the event your checkbook is used without your knowledge.
You are responsible for notifying the bank if your checkbook is lost or stolen. This needs to be done as soon as possible to limit any losses.
Unauthorized Bank Accounts
Bank accounts opened at financial institutions in your name without your authorization are fraudulent accounts regulated by the state’s attorney general’s office. No liability is incurred by you, on accounts opened in your name.
This is difficult to detect and can become very costly. A credit report can help identify irregularities that could indicate this form of identity theft.
Credit Card Breach
Credit cards are breached most frequently because criminals don’t need the physical card anymore. They just need the card number to start ordering online.
Federal Law provides for a liability cap of $50, if you suffer any losses in this way. You are required to notify the bank immediately to prevent any further losses, but the legal time limit to provide notice is set at 60 days.
Applying for new Credit
When applying for new credit, the banks are responsible for verifying the ID of any individual making the application. The bank will be responsible for covering any losses you might suffer from successful impersonation.
How Much Can Be Refunded?
Victims of identity theft are afforded several types of damages when initiating a civil claim. The amount that can be claimed will vary depending on the facts of that case.
If the civil lawsuit is successful, the victim could potentially recover:
- Compensatory damages
- Most common damages award issued, aims to cover financial losses caused by the crime.
- Punitive damages
- meant to provide the victim with additional monies and deter the defendant from similar future offenses. These are awarded only in exceptional circumstances.
- Emotional damage
- Emotional distress like anxiety and depression triggered by the theft may open an option to claiming emotional damages.
- Injunctive relief
- Court orders that require a defendant to take or refrain from a certain action.
The Fair Credit Reporting Act (FCRA) also allows victims to request creditors and debtors stop reporting on the fraudulent accounts. The fraudulent information must be removed from the credit report and an extended fraud alert protection must be assigned to the victim’s portfolio.
Do I Need to Hire An Attorney if I Am A Victim Of Identity Theft?
Hiring a private attorney and having them assemble your case will allow you to navigate parts of the case that could be difficult on your own.
Identity theft cases allow for multiple parties to be sued, and require filing of various state and federal laws. Different financial institutions may have different procedures in place for dealing with identity theft lawsuits.
Beyond assembling and presenting your case, an attorney can assist with the recovery process and provide guidance on which financial institutions or government agencies to contact, and explain how to request an instance of identity theft to the Federal Trade Commission (FTC).
Trying to build a case independently could have complications that could harm the outcome of your case. So, if prevention fails and identity theft prevails, consider consulting an identity theft attorney to help you identify and recover your full potential damages.