Fraud Victim Sues Bank, Cash App Over 'Bogus Electronic Transfer'

Fraudsters misrepresented themselves online or by phone to obtain access to Lisa Torres’ Cash App account and used the app to drain her Sutton Bank account of $2,734, alleged Torres’ complaint Tuesday (docket 5:24-cv-00801) in U.S. District Court for Central California in Riverside. Though the San Bernardino County, California, resident reported the “bogus electronic transfer” immediately, the bank and Cash App provider Block, Inc., formerly Square, declined her dispute and have refused to restore her funds, said the complaint. Defendants Sutton Bank and Block are well aware of fraudulent scams in which criminals pose as legitimate sellers or Cash App users, said the complaint, citing a New York Times article on fraud involving instant payment apps such as Cash App, Venmo and Zelle. The complaint also cited a Sutton Bank webpage for “Prepaid Card Support” with a disclaimer about Cash App that says the bank doesn’t “issue, maintain or service your Cash App account, which is offered by Square, a separate company that we are not affiliated with.” Sutton Bank “will not be responsible for any and all manner of inaccuracy, delay, theft or other loss of funds that may result” from use of peer-to-peer payments using Cash App, it says. The support page directs customers to Square Cash App support for questions. Torres alleges she was awakened by a text message at 4 a.m. March 15 from Cash App stating that $2,734 was taken from her Sutton Bank account. She called Sutton Bank and Cash App when their offices opened and informed them of the fraudulent, unauthorized funds removal, even as fraudsters continued to attempt to send payments from her account. About an hour later, Torres received an email from Cash App and Sutton Bank asking her to answer a series of questions and provide proof of her dispute, and she promptly responded, said the complaint. On March 18, Torres emailed the defendants to say she never provided her log in credentials for Cash App to anyone, the complaint said. Two days later, she received an email declining her dispute and informing her the transaction with the bank had been authorized. She filed a police report, it said. Torres “implored” the defendants again to reconsider their decision and answered more questions, but they refused to consider her answers because she responded more than three days after receiving them, it said. After a third attempt to initiate an investigation, the defendants closed the dispute “in the bank’s favor” and declined to reopen it, the complaint said. Torres asserts violations of the Electronic Fund Transfers Act and the California Unfair Competition Law. She seeks actual damages, including for emotional distress; treble, statutory, punitive and nominal damages; an order of restitution; prejudgment interest; and attorneys’ fees and costs.