Charles Schwab Faces Lawsuit Over Failure to Prevent Elder Fraud in Computer Hack

Posted on October 9th, 2024 at 1:26 PM
Charles Schwab Faces Lawsuit Over Failure to Prevent Elder Fraud in Computer Hack

From the desk of Jim Eccleston at Eccleston Law

A new lawsuit claims that Charles Schwab failed to protect an elderly client from a fraudulent scheme that drained her retirement savings.

As reported by Financial Planning, the suit asserts that scammers posing as government agents persuaded the 92-year-old  to transfer funds to them, ostensibly to protect her from fraud. Despite repeated warnings from the clients, Schwab allegedly refused to implement a permanent account lock, instead temporarily freezing and unfreezing the account five separate times.

The scam began with unusual "clicking" sounds on her computer, which led her to believe she was hacked. Scammers, posing as government agents, then convinced her to grant them remote access to her computer and instructed her to execute multiple transactions. The lawsuit states that Schwab allowed these transfers to proceed, including several to known scam-related companies, without adequately investigating. 

FinancialPlanning reports that while Schwab eventually gave the daughter "limited trading authority" on her mother’s account, the suit claims this measure was ineffective in preventing further fraud.

The case highlights the growing issue of elder fraud, which cost individuals 60 and older an estimated $3.4 billion in 2023, according to the FBI.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

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