How did this happen?
In December, a woman using a fake driver's license managed to make two separate withdrawals from Katrina’s Chase account, totaling $1,500.
The fraudster didn’t use a debit card or PIN — just a convincing ID that fooled the tellers. The bank became suspicious when the thief attempted a third withdrawal and asked for additional verification through multi-factor authentication.
"They said, 'OK, I need you to confirm your identity with a code that we'll send to your cell phone.' She said, 'Oh, OK. I forgot my phone in the car. Let me go get it.’ And that's when she never returned," Katrina told reporters.
The bank then immediately called Katrina to confirm that she had been at the bank branch. When she told them she hadn't, the branch informed her of the fraud. Katrina quickly filed a police report and opened a claim with Chase's fraud department.
She expected the bank to resolve the issue quickly but was instead met with resistance from Chase.
Ready to boost your savings?
Click here for the best savings accounts! Discover top rates and no-fee options to grow your money effortlessly.
Start saving smarter today!Why did Chase deny her refund?
Despite the evidence, Chase initially denied Katrina’s claim. In a letter, the bank stated that she had either authorized the transactions or had somehow benefited from them.
"I was gobsmacked," Katrina said. "Even the branch — the Chase branch’s word — was still not enough," she told ABC 7 News.
Frustrated and out of options, she contacted 7 On Your Side, a consumer advocacy news team. Within 24 hours of their inquiry, Chase reversed course and refunded Katrina's account.
But she had already spent over $200 on an identity theft protection subscription to safeguard herself in the future. Meanwhile, Orinda police are investigating the case, and Chase has provided video footage of the suspect.
Chase says it has ID checks in place to prevent this type of fraud but declined to share the measures they use.
How can banks deny refunds for fraud?
Many banks have strict fraud policies that require consumers to prove they are the victims. This can be challenging — how do you prove you weren't somewhere and didn't do something?
Under the Electronic Fund Transfer Act (EFTA), banks are required to refund fraudulent transactions on debit cards and online transfers when there was no loss or theft of an access device — depending on when the event is reported.
Under the EFTA, customers must report the fraud within 60 days of receiving their bank statement, according to the Federal Reserve. If too much time has passed, the bank may deny the claim. Some banks may have shorter timelines for reporting suspected fraud.
But fraud that occurs in person at a bank branch may be treated differently. Because the thief presented a form of ID, Chase may have determined the teller had a reasonable basis to believe the withdrawal was legitimate.
Banks also increasingly rely on “customer responsibility” clauses in their terms and conditions, which can lead to disputes over who is liable for fraudulent transactions.
If a customer shares their banking credentials, falls for a scam or unknowingly allows someone access to their account, the bank may claim the loss is a result of the customer’s actions.
Some banks also deny claims if they suspect "friendly fraud" — where the customer later regrets a legitimate transaction or disputes a charge knowingly made by a family member or acquaintance.
As for Katrina, she hopes Chase will improve its security measures to prevent others from falling victim to similar scams.
"I can't sing high enough praises for 7 On Your Side," Katrina shared. "Chase definitely needs to bolster their security. I want to say do better."
The richest 1% use an advisor. Do you?
Wealthy people know that having money is not the same as being good with money. Advisor.com can help you shape your financial future and connect with expert guidance . A trusted advisor helps you make smart choices about investments, retirement savings, and tax planning.
Try it now
