ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
Home Uncategorized

Eastern District of Michigan dismisses $2 million wire fraud suit against Fifth Third Bank

September 1, 2026
Reading Time: 2 mins read
Eastern District of Michigan dismisses $2 million wire fraud suit against Fifth Third Bank

Wire fraud
Hegira Health Inc. v. Fifth Third Bank N.A.
Date: July 30, 2026

Issue: Under UCC Article 4A, did Fifth Third Bank use commercially reasonable security procedures and act in good faith by not preventing $2 million in fraudulent wire transfers from customers’ accounts?

Case Summary: A Michigan federal court dismissed a lawsuit accusing Fifth Third Bank of violating Uniform Commercial Code (UCC) Article 4A by failing to use commercially reasonable security procedures and act in good faith to prevent more than $2 million in fraudulent wire transfers from customers’ accounts.

In July 2025, Hegira Health Inc. sued Fifth Third Bank, alleging it failed to detect and stop a series of fraudulent wire transfers after an imposter gained access to its accounts. According to Hegira, in May 2025, an imposter posing as a Fifth Third Bank fraud prevention officer obtained Hegira’s login credentials and administrative access to its accounts. Afterward, someone changed Hegira’s wire-transfer settings from dual authorization to single-user approval. Fifth Third Bank then processed 14 wire transfers totaling about $2.09 million to beneficiaries who shared the same Miami address. Hegira claimed that Fifth Third Bank should have flagged the unusual activity, issued fraud alerts or holds, and stopped the transfers before the losses grew. Although Hegira recovered some funds, it alleged that Fifth Third Bank failed to reimburse the remaining losses.

Fifth Third Bank removed the case to the Eastern District of Michigan and moved to dismiss, arguing it acted in good faith and followed the parties’ agreed-upon, commercially reasonable security procedures. Judge Susan DeClercq agreed, ruling that UCC Article 4A governed Hegira’s claims and set the rules for assigning losses from unauthorized wire transfers. Under Article 4A § 202, a bank may treat an unauthorized payment order as effective if the bank and the customer agreed to a security procedure, that procedure was commercially reasonable, and the bank accepted the order in good faith and complied with the agreed security requirements. When those conditions are met, the customer bears the loss from the unauthorized transfer.

After deciding that UCC Article 4A governed Hegira’s claims, the court concluded that Hegira failed to state a claim even without considering the parties’ agreements. Reviewing only the complaint, the court ruled that Hegira did not identify any specific security procedure the parties agreed to use. Instead, Hegira argued that Fifth Third Bank’s fraud engine, risk scoring, alerts, holds, and other fraud-response measures should have detected or stopped the transfers. The court explained, however, that Article 4A recognizes a security procedure only when the bank and customer agree to use it. Because Hegira did not allege that the parties agreed to use those fraud-detection measures as security procedures, the court held that Fifth Third’s failure to use them could not support an Article 4A claim.

Bottom Line: The court refused to hold Fifth Third Bank liable for the wire fraud because Hegira could not identify any agreed-upon security procedure that the bank handled in a commercially unreasonable manner or failed to follow in good faith.

Document: Opinion

Tags: Banking Docket
ShareTweetPin

Related Posts

Supreme Court upholds government authority to dismiss False Claims Act cases

Eighth Circuit affirms vacatur of Regulation II

Uncategorized
November 3, 2026

While the Eighth Circuit vacated Reg. II, the Sixth Circuit has yet to issue its decision in Linney’s Pizza. There, a Kentucky federal court granted summary judgment to the Fed and rejected the merchant’s challenge to Reg. II.

U.S. Supreme Court vacates Ninth Circuit preemption decision

U.S. Supreme Court to review discovery ruling in DOGE FOIA lawsuit

Uncategorized
November 3, 2026

The U.S. Supreme Court agreed to review a D.C. Circuit ruling allowing discovery to determine whether the U.S. DOGE Service qualifies as an agency subject to the Freedom of Information Act.

Minnesota dismisses cash-sweep program lawsuit against U.S. Bancorp

Southern District of New York rules Merrill Lynch but not BofA must face cash sweep lawsuit

Uncategorized
November 3, 2026

A New York federal court dismissed a class action against Bank of America Corporation, Bank of America N.A. and Managed Account Advisors LLC but allowed claims against Merrill Lynch to proceed in a lawsuit alleging unreasonably low interest...

Former CFPB enforcement attorneys file class action challenging Unlock’s home equity agreements

Former CFPB enforcement attorneys file class action challenging Unlock’s home equity agreements

Uncategorized
November 3, 2026

Colorado homeowner Sheila Johnsen filed a class action against Unlock Partnership Solutions alleging that they disguised mortgage loans as home equity agreements to evade lending laws, charge excessive interest and impose unfair contract terms.

New York district court denies Terraform Labs’ motion to dismiss, declines to follow Ripple ruling

Northern District of California dismisses cryptocurrency fraud lawsuit against banks, Stanford Federal Credit Union

Uncategorized
November 3, 2026

A California federal court dismissed a lawsuit alleging that several financial institutions helped carry out a $570,000 cryptocurrency scam, ruling that an anonymous married couple failed to state valid claims for aiding and abetting fraud and unauthorized wire...

Florida federal court denies motion to dismiss shareholder derivative lawsuit

Florida federal court denies motion to dismiss shareholder derivative lawsuit

Uncategorized
November 3, 2026

A Florida federal court refused to dismiss a lawsuit alleging that bank directors breached their fiduciary duties by changing corporate bylaws to protect their positions and prevent shareholders from removing them.

NEWSBYTES

FinCEN, Fed withdraw proposal to lower international fund transfer recordkeeping threshold

November 6, 2026

Waters, Casten outline proposed agendas for House Financial Services Committee

November 6, 2026

ABA DataBank: Professional, business services jobs lead strong October report

November 6, 2026

SPONSORED CONTENT

Banking Technology at a Strategic Crossroads

Banking Technology at a Strategic Crossroads

October 29, 2026
The Shift from Demographic Marketing

The Shift from Demographic Marketing

October 1, 2026
Meeting Ag Lending Goals Without Going It Alone

Meeting Ag Lending Goals Without Going It Alone

October 1, 2026
Beyond the Portfolio: The Wealth Manager’s New Role in a Multigenerational World

Beyond the Portfolio: The Wealth Manager’s New Role in a Multigenerational World

September 17, 2026

PODCASTS

Podcast: Proactively managing the core provider relationship

October 22, 2026

Podcast: How community banks can keep farmers farming in turbulent times

October 14, 2026

Podcast: The birth of American money and how it triggered a revolution

October 8, 2026

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2026 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2026 American Bankers Association. All rights reserved.