JACKSONVILLE, Fla. — A Jacksonville woman is suing VyStar Credit Union after she says approximately $42,000 was stolen from her accounts in a fraud scheme despite the credit union detecting suspicious activity, according to a lawsuit reported by the Jacksonville Business Journal.
The lawsuit alleges the fraud was able to continue because security controls intended to lock the woman’s account were deliberately disabled even after VyStar’s systems detected anomalous activity. The plaintiff also alleges VyStar subsequently denied her fraud claim, the Business Journal reported.
The plaintiff was not identified.
The allegations could raise questions about how the Jacksonville-based credit union responded to automated fraud alerts and whether internal controls designed to prevent additional transactions were properly followed. The claims are allegations and have not been proven in court.
The Jacksonville Business Journal said the plaintiff was told by VyStar employees that security controls designed to lock the account had been deliberately disabled despite the detection of anomalous activity.
Some Details Outstanding
Details on who allegedly disabled the controls, why they were disabled or the precise sequence of transactions through which the approximately $42,000 was taken.
As the CU Daily has reported, the lawsuit comes as financial institutions increasingly rely on automated monitoring systems to identify transactions that depart from a customer’s normal activity and trigger additional review or restrictions.
VyStar itself says it uses multiple layers of security and warns members about a range of fraud techniques. On its fraud-prevention website, the credit union—like most CUs–tells members that it will never call and ask them to provide one-time passcodes, debit or credit card information, answers to account security questions or online and mobile banking credentials.
Earlier Responses
The allegations in the lawsuit are notable in light of how VyStar has previously described its response to suspected fraud.
In March, VyStar employees helped stop an alleged financial exploitation scheme involving a 79-year-old member who was being driven among branches to make large cash withdrawals, according to News4JAX and a Jacksonville Sheriff’s Office arrest report cited by the television station.
The member had already withdrawn $5,000 from VyStar’s Middleburg branch and another $5,000 from its Branan Field branch before attempting to withdraw an additional $13,000 at a branch on Merchants Way. Employees questioned the transaction after the member appeared confused and learned he was being driven between branches by people waiting outside, News4JAX reported.
Employees kept the member inside the branch and contacted police. Authorities recovered the $10,000 previously withdrawn, according to the report. A family friend told News4JAX the situation was discovered after the member’s daughter received a fraud alert on her phone.
