A Colorado couple (the “couple”), who had multiple accounts with the bank, fell victim to bank fraud over a four-month period in 2022. During that time, a fraudster made three transfers totaling $66,500 from the couple’s savings account into their checking account and then issued ten unauthorized paper checks. The couple discovered the fraud only nine days after the fraudster wrote his last paper check, despite receiving monthly account statements from the bank. The bank only partially reimbursed the couple, who had lost a total of $93,891.62, because, under the terms of the bank’s customer agreement, the couple had only 60 days to report a fraudulent transfer to be fully reimbursed. According to the bank, the couple’s using the bank’s services constituted an assent to the agreement. The couple opted to sue the bank to recover the full $93,891.62 under C.R.S. 4-4-401 of the Colorado UCC, which allows a bank customer to receive full reimbursement if the customer reports an unauthorized transaction within a year, and 15 USCS § 1693 of the Electronic Fund Transfer Act (EFTA), which makes banks liable for not adequately protecting a customer’s account from fraud and liable for not reimbursing a customer who has been a victim of bank fraud,. The bank responded by filing for summary judgment.
In Wingard v. TBK Bank, SSB, 768 F. Supp. 3d 1282 (D. Colo. 2025), the district court granted and denied in part the bank’s motion for summary judgment. The court held that the couple’s claim under EFTA could not be sustained because the fraudster had used paper checks instead of an electronic medium to make the payments, and the EFTA only applies to electronic transactions. However, the court distinguished the EFTA claim regarding the 3 transfers between the savings and checking accounts because the transfers took place electronically and the couple did not receive any benefit from the transfers. The couple’s Colorado UCC claim survived summary judgment because the court found that there was a genuine dispute as to whether the couple had agreed to the bank’s terms and conditions. The reasoning for this lay in the fact that neither the bank nor the couple could produce evidence of the couple’s assent to the terms, and the court further noted that the bank never provided notice of the terms for to the couple.
By Conor Doris [email protected]
Edited By Jace Brown [email protected]
Edited By Hayden Mariott [email protected]