Failure to Flag Suspicious Activity Leads to Over $1 Million in Unauthorized Charges

This case study explores a credit card fraud incident involving over 1 million dollars in unauthorized charges, allegedly due to the credit card company's failure to flag suspicious activities and maintain adequate fraud monitoring mechanisms.

ByZach Barreto


Published on February 20, 2024

Person on laptop with credit card

Case Overview

This case study explores an incident involving a platinum credit card holder who used their card for both personal and business transactions. Without the account holder's knowledge, corporate employees fraudulently opened additional cards and accounts under their name, leading to over 1 million dollars in unauthorized charges. The credit card company failed to flag these activities as fraudulent and even allowed changes in contact information by individuals other than the account holder.

Allegations suggest that the credit card company did not adhere to proper procedures and lacked sufficient fraud monitoring mechanisms. An expert with extensive experience in credit card fraud detection standards was sought to provide insights on liability in this case.

Questions to the Banking expert and their responses


Please describe your experience in the credit card industry, specifically with fraud detection standards, if applicable.

With over 35 years of experience as a bank regulator, I have extensively reviewed banking operations including back office operations. My role involved assessing a bank's policies, procedures, and practices to determine the quality of its credit card operations, suspicious activity monitoring process, and potential cases of fraud.


What standards exist to prevent an incident like this from happening?

Preventive measures against such incidents require banks to have robust systems for monitoring credit card activity and detecting fraud. This includes reviewing the account opening application, account disclosures, and credit card account rules. Banks should also maintain a list of authorized signors and users of the card, along with those authorized to change any aspect of the account.


Have you ever reviewed a similar case? If yes, please elaborate.

Yes, I have served as an expert witness on numerous cases where it was evident that the bank should have identified suspicious activity within an account.

Recently, I worked on three cases related to unauthorized use of someone's account; one involving an elderly person's account misused by another individual, another where a business's corporate account was used by an employee for unauthorized payments, and a third where a person's account was hacked.

About the expert

This expert boasts over 35 years of experience in financial compliance, with a focus on financial institution supervision. They are a commissioned national bank examiner, certified financial crimes specialist, and anti-money laundering specialist, having spent three decades as a safety and soundness examiner for the Comptroller of the Currency. Currently serving as a banking consultant in Illinois, their expertise lies in analyzing banks' Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) programs to ensure compliance with relevant laws, rules, and regulations.

Expert headshot



About the author

Zach Barreto

Zach Barreto

Zach Barreto is a distinguished professional in the legal industry, currently serving as the Senior Vice President of Research at the Expert Institute. With a deep understanding of a broad range of legal practice areas, Zach's expertise encompasses personal injury, medical malpractice, mass torts, defective products, and many other sectors. His skills are particularly evident in handling complex litigation matters, including high-profile cases like the Opioids litigation, NFL Concussion Litigation, California Wildfires, 3M earplugs, Elmiron, Transvaginal Mesh, NFL Concussion Litigation, Roundup, Camp Lejeune, Hernia Mesh, IVC filters, Paraquat, Paragard, Talcum Powder, Zantac, and many others.

Under his leadership, the Expert Institute’s research team has expanded impressively from a single member to a robust team of 100 professionals over the last decade. This growth reflects his ability to navigate the intricate and demanding landscape of legal research and expert recruitment effectively. Zach has been instrumental in working on nationally significant litigation matters, including cases involving pharmaceuticals, medical devices, toxic chemical exposure, and wrongful death, among others.

At the Expert Institute, Zach is responsible for managing all aspects of the research department and developing strategic institutional relationships. He plays a key role in equipping attorneys for success through expert consulting, case management, strategic research, and expert due diligence provided by the Institute’s cloud-based legal services platform, Expert iQ.

Educationally, Zach holds a Bachelor's degree in Political Science and European History from Vanderbilt University.

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