Can I sue a bank for false accusation of fraud?

UPDATED: Oct 1, 2022

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Can I sue a bank for false accusation of fraud?

I went to an ATM located outside in a rough neighborhood. I was a little nervous about being outside with a wad of cash because I did not want to get robbed. I quickly stuck the money into the ATM to make a speedy cash deposit, when I realized a tad bit too late that there was a limit as to how many bills you can stick into the ATM at one time. The ATM showed me an error message and told me that I would have to call the bank because it could not release my deposit. I called the bank and the bank instructed me to file a claim so that they could investigate the ATM situation and release my funds in a few business days. Once the investigation was complete, my claim was denied. The bank informed me that they reviewed the camera footage from the ATM and based on that footage they believe that I did not put any cash into the ATM at all and that I most likely crumpled up a 20 bill along with some paper and made a false deposit. As a result of the denied claim, the bank decided to close my account due to fraud and report all of their findings to Chexsystems and the credit bureaus. In addition to this, I lost the money that was really deposited into the machine. Since my account was a business checking account, this is negatively impacting my business. I cannot fulfill any of the payments that were coming out of that account on time because the bank froze my account. I most likely will not be able to open any other bank account, apply for business or personal credit, and many other issues resulting from

a fraud flag following my name. I am being treated as a criminal and there is no way for me to do business with this on my record. I went into the bank to get an explanation as to why this was all going on but the bank would not talk to me about anything, instead, they confiscated my debit card in front of all their other customers. I am worried sick because I do not know how to defend myself and I have been calling around trying to find the right type of attorney who could help me figure out what my right are and what I can do to seek

justice for myself and my business. Can I sue the bank or what can I do to clean up this mess? I may have been accused of fraud but I did nothing wrong and the bank has no evidence of anything fraudulent, just their assumptions based on camera footage.

Asked on March 29, 2018 under Business Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

You may be able to sue them for defamation: for making an untrue factual allegation or assertion which has damaged your reputation and/or caused economic injury to you. They could try to defend the lawsuit by showing that their claim or assertion was true (since true statements, even if hurtful, are not defamation). Since they would be raising "truth" as a defense in a civil (non-criminal) lawsuit, they would have to convince the court by a "preponderance of the evidence" (that it is more likely than not) that what they said is true.
If you want to explore this option, contact a personal injury attorney: the same lawyers who do slip-and-fall or car accident cases are generally the ones who handle defamation claims, too. Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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