WaMu Gave Grandma's Money to Crooks

Dear Andrew,

I recently wrote Faye Chapman regarding an incident of fraud against my grandma's Washington Mutual checking account (Forgery Case #200602xxxxx.) You were kind enough to write my grandma in answer to my letter and invite her to contact you with any further questions. My grandma shared the letter with me and I tried to phone you today with some further questions we have. However, you were unavailable and, at my request, I was provided your email address. I'm writing on behalf of my grandma with some follow-up questions.

You note in the letter that you can only communicate regarding particulars of her account with her individually. None of my questions involve private details related to her account, so I hope you will find no obstacle to responding to these questions.

1. Washington Mutual paid funds out of my grandmother's checking account because a fraudulent telemarketing company ("the merchant") printed up a check with her account information on it. She never signed or saw the check. Although you state in your letter that she authorized the transaction, she did not authorize it according to the terms presented to her by the merchant in portions of the transaction not recorded, which disguised the fact that a demand draft would be drawn up and money taken from her account.

The company itself, I have learned, is being investigated by the state of Wisconsin and Canadian authorities. In my letter, I asked why Wamu would ever cash such a check? You wrote, "Washington Mutual Bank honored the items because they are negotiable instruments according to the Uniform Commercial Code 3104."

My question: is Wamu legally obligated to honor such items? In cases where the authorization is questionable and the instrument originates from a company with a public record of questionable practices, can a bank refuse to honor such an instrument?


2. I contacted Bank of America and asked one of their agents if they cash these kind of checks. He said that they do, but with certain known discreditable merchants, they immediately credit back the customer's account without any request even being necessary from the account holder. Another person whose mother-in-law was victimized in a scheme similar to the one that target my grandmother informed me that Wachovia, where his mother-in-law's account is held, immediately refunded the $498 taken from her account when they brought it to their attention.

In your letter, you write, "The Forgery Department is very familiar with the different telemarketing companies, and knows which ones provide a recording of the verbal authorization." Cursory research on my part revealed that the merchant in question in my grandma's case has a public history of senior fraud. See, for instance:

http://www.msnbc.msn.com/id/4534338/

Given these facts, why wouldn't Washington Mutual question the validity of the authorization or follow a policy like Bank of America or Wachovia to protect your account holders?


3. You note in your letter that my grandma should be receiving two refunds for checks cashed against her account. She has not seen either of these refunds and when I have talked with the customer support company, Client Care Relations, I get a different answer every time.

Can you give me the name and phone number of the contact with whom you spoke at Client Care Relations so that I can obtain definitive information on the status of her refunds? My suspicion is that the puported refunds are merely a diversion to get my grandma and Washington Mutual to go away.


4. In your letter, you state that my grandmother authorized one of the fraudulent merchants to write a check against her account by answering "yes" when she was asked "is Orange City, CA where the account is held?" Is getting an account holder to verbally confirm the location of their local Wamu branch sufficient authorization for anyone to write a check against your customer's account?


5. On the advice of someone with whom I discussed this matter, my grandmother and I would like if possible to initiate an R-10 chargeback against each of the unauthorized demand drafts presented against my grandma's account. Can we do this? If so, how can we do so?


6. If a chargeback is not possible, I'd like to again request Washington Mutual reimburse my grandmother for the unauthorized demand drafts cashed against her account. In making this request, I acknowledge the reason why Washington Mutual refused her initial fraud claim. In making this second appeal, I ask you to reimburse her not because the payment Washington Mutual was unauthorized but as an act of good faith and positive customer relations consistent with the practices of Bank of America and Wachovia and, I hope, Washington Mutual itself.

Thank you again for your time and attention.

Sincerely,
wamuonfraud

Thank you for providing your complaint information. As bank complaints fall outside of the DCA's regulatory authority, we would like to offer alternative options and information for possible resolution to your complaint.

Upon reviewing your complaint, it appears you have taken the necessary steps to resolve your dispute by speaking to the bank's first line representatives and management. If you are still unable to receive satisfaction from the bank, we recommend you contact the Office of Thrift Supervision (OTS), Consumer Affairs Office. For information on how to file a complaint with the OTS, you may use the following link to the OTS Web site for its complaint filing and handling process: http://www.ots.treas.gov/docs/4/48780.html For your convenience, we have also provided the contact information for the OTS West Region Consumer Affairs Office below:

Office of Thrift Supervision

West Region, Consumer Affairs
P.O. Box 7165
San Francisco, CA 94120
(650) 746-7098
(650) 746-7097 (Spanish)
(650) 746-7001 (Fax)

You may also contact the OTS at its main office at:

Office of the Thrift Supervision
Consumer Affairs, Customer Relations
1700 G Street NW
Washington, DC 20552
Telephone: (202) 906-6000
Toll free: (800) 842-6929
Web site: http://www.ots.treas.gov

Additionally, we suggest you file a complaint with the California Department of Justice, Office of the Attorney General (AG) to report the businesses that withdrew the funds from your grandmother's account. The AG's office establishes and operates projects and programs to protect consumers from fraudulent, unfair, and illegal activities that victimize consumers. For more information and assistance regarding this matter, please contact the AG directly at the following:

California Department of Justice,
Office of the Attorney General
PO Box 944255
Sacramento, CA 94244-2550
Toll free: (800) 952-5225 (in California)
Telephone: (916) 322-3360
Web site: http://www.caag.state.ca.us

Also, you may wish to contact the Better Business Bureau (BBB) for assistance. BBB's are nonprofit organizations that promote an ethical marketplace by encouraging honest business advertising and selling practices. They offer a variety of consumer services including information about a business, particularly whether or not there are unanswered or unsettled complaints. For more information, please visit the BBB Web site at http://www.bbb.org.

Further, we suggest that you contact the DCA's Office of Privacy Protection (OPP) for information regarding fraudulent charges to your grandmother's bank account. The OPP serves as a statewide resource for consumer information and source of assistance on identity theft, unsolicited telemarketing calls, unsolicited junk mail and other privacy issues. For your convenience, we have provided the contact information for the OPP below:

Office of Privacy Protection
1625 N Market Blvd., Suite N-324
Toll free: (866) 785-9663
Telephone: (916) 574-8180
Email: privacy@dca.ca.gov
Web site: http://www.privacy.ca.gov

We regret we are unable to assist you further and hope you find the above information helpful. Again, thank you for contacting the DCA.

C74

Dear C74,

I apologize in advance if I come off disagreeably in this email but your response irritates me for a number of reasons:

1. I get no sense from the website you link to that these agencies will be of any help to me. If you know one that will -- or better yet, an actual person that can help me, please send me that info. Some of these site send me in circles back to your site!

2. You don't answer -- or even acknowledge -- the specific question I ask. As a consumer affairs agency, can you direct me to someone specifically who could?

3. You really can't read my web page? Really? Are you too busy to open up a browser? Has your sysadmin taken away your internet access? Some anachronistic 19th century law that makes it illegal for state employees? I put the blog up so I could make the info readily available without having to reinvent the wheel every time I contact somebody new.. It certainly doesn't reflect all that impressively on the greatest, most advanced state in this nation. Anyway, it's probably best at this point that you not visit the website.

4. I'm a big supporter of government oversight of business, but if this is characteristic of the kind of support you offer, why do we even fund the allocation? Or is it that the governor has already starved your agency to the point that you can't afford an operating browser? If you can't help me and don't know of an agency or institution that can, I'd prefer you just say that, simply and straightforwardly. A modified form letter with a bunch of links in it doesn't really help me. I've wasted enough time on this matter that I don't need to waste any further in a bureaucratic wild goose chase.

Anyway, you get the picture. I don't mean to insult you personally, but it would be nice to get some sense that you aren't just some chatbot firing off these messages to me.

But to the substance of my original complaint. I guess my question is: is it in the state's interest to have Washington Mutual or any bank cashing checks of this nature? Are the legally obligated to do so?

If you can offer some real help, please do so. If not, feel free to state that plainly, too. I wasn't really expecting all that much to begin with.

Sincerely,
Tom

I was referred to this site by an investigator with the state of Wisconsin. Rather than repeat my tale here, I will refer you to the blog I've been keeping that provides both short summaries and details:

http://wamublamesgrandma.blogspot.com/

Please contact me with questions or advice.

Thank you for contacting the State of California, Department of Consumer Affairs (DCA). We are unable to link to your blog; however, if you are experiencing problems with a bank, we recommend you contact the following agencies for possible assistance:

The Department of Financial Institutions (DFI) regulates and licenses state banks, state savings and loans, trust companies, state offices of foreign banks, issuers of travelers checks and payment instruments (money orders), transmitters of money abroad, state credit unions, and industrial loan (thrift and loan) companies. For further information, please contact the DFI directly at the following:

California Department of Financial Institutions
801 K Street, Suite 1009
Sacramento, CA 95814
Telephone: (916) 322-5966
Web site: http://www.dfi.ca.gov

Banks that contain the word "National" or the initials "N.A.", are national banks and regulated by the (federal) Office of the Comptroller of the Currency. You may contact this office directly at the following:

Office of the Comptroller of the Currency
50 Fremont Street, Suite 3900
San Francisco, CA 94105-2292
Telephone: (415) 545-5900 (general information)
Toll free: (800) 613-6743
Fax: (713) 336-4301
Web site: http://www.occ.treas.gov

Again, thank you for contacting the DCA. We are pleased to provide you with this information.

C74

Since I work for the Bureau of Consumer Protection in [my state], I only deal with [my state's] consumers.

However, most states do have a similar Department/Bureau within their state government. Sometimes it is under the Attorney General or the Department of Justice, depending on how the state government is set up.

If you can, please post on your site for any consumers that believe they were ripped off in a similar manner, and these groups take on a lot of different names, to file a complaint with their state department. If they don't know what the department is in their state, have them file one with their state representative. They can also file an Identity Theft complaint, I believe they can do this through their bank.

When they file the complaint, it is best for them to (in detail) describe what happened, from the telephone call (including the telephone number that showed up on their caller ID), to the withdrawal from their bank account. Even if their bank has reimbursed the money lost, they should still file. It is also helpful if the consumer can obtain a copy of the check, both front and back. They can, if they choose to, black out their account information, however, leave the back unmarked, since that will provide information for the investigators.

Also, please let these people know that even if they are on the Federal or state No Call list, these people are still getting through to them.

And, urge people not to ever give out personal information (date of birth, address, social security, bank account) over the telephone, especially on calls that they had not initiated.