So, you may be wondering what options you have to recover a judgment or a loss if you’ve been defrauded. Many times, the best course of recovery comes from third parties or insurers. Here’s how that works:
- The Wall Street Journal recently discussed Wells Fargo’s failure to police customer crimes. They highlight the bank’s lawsuits due to alleged Ponzi schemes it failed to detect. When scammers deposit money into a bank, insufficient due diligence or monitoring often occurs, making it easy to spot fraudulent activities.
- Banks have the capability to identify fraudulent schemes through pattern analysis of account activity. Failure to do so might label the bank as a third-party enabler, leading to vicarious liability.
- In cases where scammers vanish, leaving insufficient funds to compensate victims, turning to third parties becomes crucial. Banks are often the initial target for recovery, as seen in the Scott Rothstein Ponzi scheme case involving TD Bank in South Florida.
- Judgment Preservation Insurance: A Risk Management Option
Another avenue for recovering a judgment lies in insurance—specifically, judgment preservation insurance. This insurance serves as a risk management option when you’ve won a judgment but haven’t received the money. - After a successful lawsuit, you might not immediately receive the awarded sum due to various reasons, like appeals or negotiations. Judgment preservation insurance can be purchased to provide leverage for ensuring full payment. Even if an appeal reduces the amount owed, the insurance covers the difference, securing your compensation.
Consider these two options—judgment preservation insurance and third-party liability—when seeking recovery against a fraudulent third party. They can prevent the loss of a valid claim and ensure you receive due compensation.
