Looking for advice on this situation. Business Email Compromise - Wired $45K to Scammer, Bank Wont Help Any guidance would be greatly appreciated.
Details: I'm in a situation where I need to understand my legal options. Has anyone dealt with something similar?
This happened to me with a different processor. The demand letter approach works — cite their Terms of Service provisions about timely disbursement and threaten arbitration. Most processors settle to avoid the cost.
Keep in mind that payment processor disputes are governed by the contract you signed, not consumer protection law (since you're a merchant). Read your merchant agreement carefully for the dispute resolution process.
This happened to me with a different processor. The demand letter approach works — cite their Terms of Service provisions about timely disbursement and threaten arbitration. Most processors settle to avoid the cost.
Keep in mind that payment processor disputes are governed by the contract you signed, not consumer protection law (since you're a merchant). Read your merchant agreement carefully for the dispute resolution process.
File a complaint with the CFPB immediately. Payment processors and banks respond much faster to regulatory complaints than to customer service tickets. Example: a $20K hold can be released within a week after a CFPB complaint.
File a complaint with the CFPB immediately. Payment processors and banks respond much faster to regulatory complaints than to customer service tickets. Example: a $20K hold can be released within a week after a CFPB complaint.
For anyone in this situation: don't rely on a single payment processor. Always have a backup processor ready to go. Diversification isn't just for investments.
Good discussion. Tagging this for the resource library.
Our company lost $85K to a BEC (business email compromise) scam. Hackers intercepted email between us and a vendor, changed the wire instructions, and we sent the payment to the wrong account. By the time we realized (3 days later), the money was gone.
Our bank said "you authorized the transfer, not our problem." But we've since learned that banks DO have obligations under UCC Article 4A for wire transfers — specifically, the bank must follow "commercially reasonable security procedures." If they processed an $85K wire to a brand new beneficiary without any verification callback, they may have failed this standard.
UCC 4A-202 is your friend here. It establishes that a bank can only charge the sender for an unauthorized payment order if it proves the security procedure was (1) commercially reasonable and (2) the bank accepted the order in good faith and compliance with that procedure.
Key arguments: (1) Was there a callback procedure for high-value wires? If yes, did the bank follow it? (2) Did the wire go to a first-time beneficiary? Many banks' own policies require additional verification for new payees. (3) Was the receiving bank in a known fraud hotspot?
Also: immediately file a "recall" request through your bank — they'll send a SWIFT message to the receiving bank. Time is critical. If any funds remain in the receiving account, they can be frozen. After 3 days, recovery rates drop below 10%.
The key with frozen funds is to provide exactly what they ask for and nothing more. Over-explaining or providing unsolicited documents can actually delay the review process.