Spoofing, also known as scam calls, that impersonate a victim's own bank have become one of the fastest-growing forms of fraud in the country. While everyday Americans lose substantial amounts of everything from retirement savings and downpayments on homes to college and travel funds, the law governing who pays for fraud is still being written in real time.
Scam Calls are a Growing, Costly Problem
According to the FBI's Internet Crime Complaint Center (IC3), over 191,000 spoofing and impersonation complaints were logged in 2025. Reported losses exceeded $215 million, but that's just one slice of a much larger problem for older Americans.
The FBI's 2025 IC3 Annual Report found that adults 60 and older filed more than 201,000 fraud complaints of all kinds, including investment schemes, tech-support scams, romance scams, and impersonation calls. The reported losses are staggering, reaching $7.75 billion, a 59% jump from 2024. Phishing and spoofing were among the most common complaint types for that age group.
How Bank Scam Calls Work
The tactic is simple but effective, thanks to technology. Caller ID spoofing allows criminals to display a bank's real name and phone number. Sometimes, it’s the exact number printed on the back of a victim’s debit card.
Such was the case in a widely reported ABC7 Chicago investigation that found a Chase customer lost $40,000 to scammers impersonating her bank. On top of the display that indicated the call was coming from the bank, they knew her exact balance. This combination of factors convinced the victim to move her money to “protect” it.
The spoofing ploy has become sophisticated, but banks and the FBI stress that no legitimate financial institution will ever ask a customer to transfer funds to keep them safe.
The Legal Patchwork of Fraud Liability: EFTA, Regulation E, and the UCC
Whether a bank has to reimburse a scam victim often depends on which law applies, but that question of who’s liable is genuinely unsettled.
First, there’s the Electronic Fund Transfer Act (EFTA) and Regulation E. They provide protections and give consumers strong rights to challenge unauthorized electronic transfers, like those that occur on stolen debit cards or hacked bank logins.
But when it comes to bank scams, victims typically authorize the transfer themselves, even though they were deceived into doing it. This creates a gray area that the EFTA doesn't clearly address.
On the flip side, traditional bank wire transfers have long fallen under Article 4A of the Uniform Commercial Code (UCC). It’s more bank-friendly in that institutions must meet accepted security procedures for verifying wire transfers. If they do and acted in good faith, Article 4A says banks don’t have to reimburse customers when they follow a phone scammer’s instructions and transfer them money.
New York Phone Scam Lawsuit
New York v. Citibank is an ongoing phone scam lawsuit that’s been making headlines. The reason there’s a spotlight on the case is because the outcome may impact similar bank fraud liability cases.
Filed in January 2024, NY Attorney General Letitia James sued Citi, alleging the bank failed to secure customer accounts and broke the law when they refused to reimburse fraud victims. Citi tried to get the case thrown out, but a year later, AG James announced a court win when a U.S. District Judge denied Citi's motion to dismiss. The judge determined that the EFTA and Regulation E apply to specific parts of consumer wire transfers.
It was a significant ruling because it went against decades of interpretation of how the law is applied to customers who fall prey to spoofing. The case was then sent to the Second Circuit, and the Citi phone scam lawsuit in New York is awaiting another ruling following oral arguments heard in April.
Regardless of which way the case goes, it will help determine what federal laws apply to and set a reimbursement standard for the growing wave of bank impersonation fraud.
Possible Zelle Phone Scam Class Action
In recent years, there have been phone scam class action filings as fraudulent calls and Americans’ losses drastically increased. Peer-to-peer payment app Zelle is one example. The app is jointly owned by seven of the largest U.S. banks through Early Warning Services (EWS).
The Consumer Financial Protection Bureau (CFPB) sued EWS, Bank of America, JPMorgan Chase, and Wells Fargo in December 2024, claiming more than $870 million in fraud losses between 2017 and 2023. The case was dropped in March 2025 after a change in federal leadership.
However, New York Attorney General Letitia James refiled the case against EWS at the state level in August 2025. The lawsuit alleges Zelle failed to protect users from fraud and is seeking $1 billion.
Separately, private class actions, including Tristan v. Bank of America and a suit against Navy Federal Credit Union, claim violations of state consumer-fraud statutes. However, many attorneys are now pursuing mass arbitration instead of class actions because of bank account agreements.
Getting Money Back from Phone Scams Is the Exception, Not the Rule
A Connecticut woman scammed out of $550,000 by fake tech-support callers recovered roughly $221,000 when her bank reversed one wire transfer. She got the remainder through a federal civil forfeiture action, which is a process involving Homeland Security Investigations and the Justice Department.
While this and other stories may give hope to consumers who lost money to spoofing, it’s rare to recover losses of this kind.
Who Else Could Be Liable for Bank Scams?
Banks aren't the only potential defendants in a fraudulent banking scam lawsuit. How liability in fraud cases like these is applied can depend on how the scam was executed.
Phone carriers could be held liable because legislation under the Federal Communications Commission says they’re responsible for authenticating caller ID and verifying identities before allowing calls to connect. The FCC has previously fined a carrier over spoofed robocalls that slipped through inadequate verification.
Other possible parties that could be liable for bank fraud scams include payment-network operators like EWS, and money-transfer companies such as Western Union and MoneyGram. Both companies have paid nine-figure federal settlements for enabling past fraud.
What Victims of Phone Scams Can Do
Victims of scammers who impersonate financial institutions should report their losses immediately to their bank, then file a complaint at IC3.gov. Reports made within about 72 hours can sometimes be routed through the FBI's Financial Fraud Kill Chain to freeze funds before they disappear.
Those who want to know if they have a civil case should consult with a consumer protection or financial services attorney. Make sure they’re experienced in EFTA/Regulation E disputes. Elder-law attorneys may also help when the victim is a senior.
Where fraud is widespread and tied to a bank's own systems or policies, firms that handle mass arbitration or class litigation may be the best path for recovery rather than filing an individual lawsuit.
With the recent Apple warning about fraudulent callers using Facetime and the FBI’s efforts to raise awareness about spoof calls, it’s clear that Americans must be vigilant.
