Fraud victim sued

Bank Must Pay for Damages Caused by Online Fraud

An unknown individual persuaded a man from Upper Austria to make 41 transfers totaling 200,000 euros.(Bild: Acronym - stock.adobe.com)

An account holder fell for an online scam and granted the fraudsters access to two of his accounts. Total loss: 200,000 euros. However, the victim also believed the bank was partially at fault, as the monitoring system should have triggered an alert. He filed a lawsuit—and was partially vindicated.

“I’m from your bank and need to stop some suspicious payments.” On January 4, 2023, an account holder received this scam call, which his bank had warned him about shortly before. But the club president fell for the scam and granted the caller access to his personal account and the club account, for which he had access rights.

41 debits authorized
During a 1.5-hour call in standard German, the scammer told the account holder that he was from the bank’s technical support, had discovered suspicious transfers, and needed to perform a security scan of the club’s account. During the call, the Upper Austrian authorized a total of 41 debits using the two-factor authentication system via the approval app. Total loss: approximately 200,000 euros, with 17,000 euros coming from his personal account.

Victim sued the bank
Once the fraud was uncovered, the victim sought legal recourse. He essentially argued that he had been deceived about the purpose of the transfers and that the bank had breached its statutory and contractual duties of care. After all, the Fraud Transaction Monitoring System (FTM) should have triggered an alert.

Higher Regional Court Partially Ruled in Favor of Plaintiff
His lawsuit was dismissed by the Regional Court, but the Higher Regional Court (OLG) partially ruled in favor of the plaintiff. Although the judge also concluded that the victim had acted with gross negligence, the bank had also breached its duties of care and protection.

Landmark ruling
The FTM system in use was not sufficiently robust, as the cluster of transactions and the unusual payment patterns should have been flagged and stopped. The bank was ordered to reimburse the victim for half of the loss incurred in the personal account. The ruling is final.

„Krone“-Kommentar

Eigenverantwortung als bester Schutz

Security is a top priority for banks, which is why virtually all financial institutions use fraud monitoring systems designed to detect and stop suspicious transactions. 41 transfers by a private individual in 1.5 hours are certainly anything but average. Nevertheless, the fraud was not prevented, and the bank placed the entire blame on the customer.

(Bild: Krone KREATIV/Alexander Schwarzl, Markus Wenzel)

In a landmark ruling, however, the Linz Higher Regional Court decided that the financial institution also bears partial responsibility. That is good and right, but personal responsibility is safer. So don’t fall for scammers in good faith!