Elder Abuse
Kanter-Doud v. Wells Fargo Bank, N.A.
Date: Jan. 31, 2024
Issue: Whether the actions of Wells Fargo’s employees constituted Elder Abuse or an unlawful, unfair or fraudulent business practice.
Case Summary: A California federal district court dismissed a lawsuit alleging that Wells Fargo facilitated a financial scam against a senior.
Jody Kanter-Doud was a long-standing customer of Wells Fargo. In 2014, her health started to decline, causing her to open a priority credit line with the bank to help pay medical bills. Kanter-Doud did not use the account for seven years.
In 2021, Kanter-Doud received an email purporting to be Microsoft, stating that she had an unpaid balance of $399.00. After calling the helpline, the scammer informed Kanter-Doud she needed to reverse the charge for Microsoft to refund her money. After the refund, the scammer told Kanter-Doud that Microsoft accidentally refunded her $39,000.00. This money appeared in her bank account, but Kanter-Doud was unaware the money was from her priority credit line. The scammers told her to initiate a wire transfer at Wells Fargo to fix the issue. Kanter-Doud initiated several wire transfers, following the scammer’s instructions. Kanter-Doud was later instructed to complete a risk evaluation and was told she was likely a victim of a fraudulent scheme.
Jody Kanter-Doud sued Wells Fargo alleging it violated California’s Elder Abuse and Dependent Adult Civil Protect Act (EADACPA) and California’s Unfair Competition Law (UCL). The EADACPA prohibits direct or indirect financial elder abuse. Direct financial elder abuse occurs when a person or entity takes or retains real or personal property of an elder or dependent adult for wrongful use or intent to defraud. Wells Fargo argued Kanter-Doud did not show either a taking or wrongful use occurred. The district court concluded there was wrongful use because Wells Fargo’s employees should have known a scam was occurring, but Wells Fargo did not “take” from Kanter-Doud because it did not deprive her of any property rights. As a result, the court granted Wells Fargo’s motion to dismiss the direct elder abuse claim.
Indirect elder abuse occurs when a person or entity helps take or retain real or personal property of an elder or dependent adult for wrongful use or intent to defraud. The district court emphasized the person or entity must have actual knowledge of a third-party scammer’s conduct for indirect elder abuse to occur. In this case, the court concluded Kanter-Doud did not plead enough facts to show that Wells Fargo had actual knowledge of the scammers’ conduct. Further, Kanter-Doud never informed Wells Fargo’s employees about the conduct of the scammers. As a result, the court granted Wells Fargo’s motion to dismiss the involuntary elder abuse claim.
The district court also granted Wells Fargo’s motion to dismiss the UCL claim. The UCL prohibits any unlawful, unfair or fraudulent business act or practice. Kanter-Doud argued Wells Fargo’s conduct violated all these prongs of the UCL. The district court disagreed. First, the court determined Wells Fargo’s conduct was lawful because the court decided Wells Fargo did not violate the EADACPA. Second, the court determined Wells Fargo’s conduct was not fraudulent because Kanter-Doud did not allege any facts addressing how Wells Fargo engaged in fraud. Finally, the court determined Wells Fargo’s conduct was fair. The court balanced the impact of Wells Fargo’s business practice on its alleged victim against the reasons and justifications of the alleged wrongdoer. The court pointed out that Kanter-Doud did not allege any facts addressing the relative weight of Wells Fargo’s risk evaluation practice against the harm posed to consumers.
Bottom Line: While the district court dismissed the case against Wells Fargo and acknowledged the missing elements within Kanter Doud’s first amended complaint, the court granted her an opportunity to file a second amended complaint to correct the discrepancies. Kanter-Doud must file the second amended complaint or notice of her intent not to file by March 25, 2024.
Documents: Order
