Law Designed to Protect Seniors Does Not Impose a Duty on Banks to Report Elder Abuse to Authorities

Following bench trial, a trial judge ruled that a state law designed to protect seniors and other vulnerable customers does not (1) impose a legal duty on a bank or its employees to report fraudulent wire tire transfers to authorities, or (2) create a private right of action permitting an elderly customer who was the victim of senior abuse to sue the bank for damages. Lucca v. Wells Fargo Bank N.A., 441 N.J. Super 301 (Law Div. Jan. 28, 2015)

During 2011, Margaret Lucca, who was then 82 years old, made approximately 27 wire transfers, totaling roughly $330,000, from her account at Wells Fargo Bank. Lucca sent the funds at the direction of an individual who telephoned her home, identified himself as a lawyer, and provided her with information for the wire transfers. The recipients of the wire transfers were individuals in Alabama and Costa Rica, none of whom Lucca knew. Simply stated, plaintiff was the victim of a scam, and she never recovered the funds.

Lucca sued Wells Fargo, and Samantha Weinstein, a Wells Fargo employee who helped her arrange the wire transfers. Plaintiff charged defendants with negligence, breach of contract, breach of the implied covenant of good faith and fair dealing, and a violation of N.J.S.A. 17:16T-1 to -4 based on the failure to “disclose the wire transfers to the appropriate authorities.”

Before trial, a pretrial judge dismissed plaintiff’s claims of negligence, breach of contract and breach of the implied covenant of good faith and fair dealing. The pretrial judge declined to dismiss the remaining claim based upon the alleged failure to disclose the wire transfers to the police or to adult protective services, ruling that the statute created a cause of action if plaintiff could prove that the bank acted in bad faith.

A two-day bench trial was held. Thereafter, the trial judge that the case turned on whether N.J.S.A. 17:16T–1 to –4 imposed a duty on a financial institution to notify the authorities of a suspected scam. If so, then plaintiff could assert a claim against the bank for the failure to notify the appropriate authorizes.

After reading the legislature’s statement of purpose in conjunction with the statute, the trial court concluded that the statute does not require a financial institution to report to the police or adult protective services when the institution suspects a senior or vulnerable customer is the subject of a scam. Rather, the court found that the statute encourages disclosure, but does not require disclosure. Consequently, because N.J.S.A. 17:16T–1 to –4 creates no statutory duty on the bank to report suspected abuse, the court found that plaintiff had no private cause of action against the bank. As a result, the court dismissed plaintiff’s remaining claim based upon the alleged failure to disclose the wire transfers to the police or to adult protective services.

The Lucca case is annexed here – Lucca v. Wells Fargo Bank N.A., 441 N.J. Super 301 (Law Div. Jan. 28, 2015)

For additional information concerning elder abuse actions, visit: https://vanarellilaw.com/will-contests-probate-litigation-elder-abuse-actions-2/#viiieaa

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