A sender wired money to an account at a bank, thinking it belonged to the intended receiver. The account instead belonged to hackers who had pretended to be employees of the intended receiver. The sender filed suit against the bank, claiming that the bank should have screened its customers more carefully. The district court dismissed the suit for failure to state a claim and the sender appealed.
In Kent Grp. Partners, LLC v. Citizens Bank, NA., No. 23-3743, 2024 WL 945239, 2024 U.S. App. LEXIS 5537 (6th Cir. March 5, 2024), the court affirmed the judgment of the district court, holding that the sender had failed to state a claim. The court first addressed the sender’s first claim under the UCC §4A-207, which addresses when there is a discrepancy between an account number and the intended beneficiary. The court held that the sender never alleged particular facts supporting the allegation that the bank knew of the fraud. The evidence proffered by the sender included mere conclusory statements. The court then addressed the civil conspiracy claim, which once again requires knowledge of the fraud as well as a malicious combination between the hackers and the bank. The sender failed to bring evidence that shows the bank conspired with the hackers. Finally, the court addressed the sender’s final argument that the district court erring in dismissing the case with prejudice. The sender did not amend the complaint and did not file a proposed amendment, resulting in a dismissal with prejudice for failure to state a claim.
By: The Editors