Bank fraud and a NRI’s nightmare
During the summer of 2001, after much research and tips from friends Manoj (name changed) opened a NRE bank account with a large international Bank (hereinafter referred to as “Mega Bank” - real name not mentioned because we don’t want their lawyers to drag us into their mess) with offices in India , USA and across the world. Manoj joined a group of thousands of desis wanting to set up a bank account to facilitate easy transfer of funds between US and India. He also wanted to give his retired parents access to funds when needed.
Little did Manoj realize that after 7 years, his account will get wiped clean of $40, 000 and no support from the Mega Bank representatives. At the time of account setup Mega Bank issued Manoj with an ATM card. Manoj never activated the card as he had no need to use the funds here in the US. The card expired in 2006 and Mega Bank did not reissue the card for a couple of years. In 2008, the bank mailed Manoj a replacement ATM card. During the last several years Manoj had been accumulating his savings totaling $40,000 in the NRE account. With a steady job at a large employer in downtown Detroit (name not revealed for the same reason cited above) Manoj was able to save money to buy property in India.
During first week of November 2008, Manoj takes his Mega bank account folder with him to his work. His intent was to get in touch with his Mega bank relationship manager to discuss his account features. Manoj left folder in a locked desk drawer at work for sometime and took the folder back home after a few days without realizing that his ATM card was missing.
On December 31st 2008, Manoj gets a call from his Mega bank relationship manager for updating the account profile as they perform this task every year end. During the discussion, the relationship manager happened to see the account activities and enquired about several withdrawals in his account. Manoj was shocked to learn that there were withdrawals on every single day from ATM machines in Redford township (near Detroit), Kentucky and Georgia and his account had a balance of $19. There were a total of 72 transactions in 30 days with 2 to 6 transactions every day for $200 to $500 each. Every day transactions were done consecutively within a minute and still the bank did not raise an alert nor did the relationship manager. Manoj lost nearly $40,000 in savings. It came as a revelation that an NRE account customer is treated as an Indian customer and not covered by the rules that protect a US customer. The bank claimed that they were conducting an investigation but made it clear through a letter that the bank will not take any responsibility for the loss. More shocking news … there is no computer system in place to flag frequent withdrawals!
Manoj has since started filing police complaints wherever the money was withdrawn (ATM machines) and later found out that his Detroit employer had fired one their contract employees when they came across a background report indicating that the contract individual had other charges against him. After putting the pieces together Manoj has determined that this rogue contract employee most likely stole his bank ATM card from the locked drawer and somehow managed to obtain the PIN (not sure how) and robbed Manoj of his savings. This individual had a history of thefts at other fortune 500 companies around Detroit. He is a seasoned criminal with a long record and apparently knew how to get a PIN number. Manoj’s employer had failed to screen the culprit based on his past criminal record. Manoj is continuing to pursue his options with the employer but with little success.
Lessons learned:
- NRI bank account is not covered by US laws and regulations. Banks do not share this information with their new customers.
- Monitor your account balance frequently. Since this is a NRE account you may choose to not check the balance until it is too late.
- Secure your ATM card and check book at all times. If you don’t need the ATM card then cancel or destroy it.