(CN) - A business owner can't hold Chase Bank liable for the $1 million his personal assistant siphoned from his credit card over seven years, the 3rd Circuit ruled.
Francis Azur, owner of ATM Corp. of America, accused the bank of Truth in Lending Act violations and negligence after his personal assistant, Michele Vanek, withdrew more than a $1 million in cash advances from Azur's Chase card.
From 1999 to 2006, Vanek withdrew between $200 and $700, typically twice a day, from Azur's credit card. Each transaction carried a finance charge of $4 to about $20.
When Azur discovered the fraudulent scheme, he fired Vanek, closed the account and disputed the charges with Chase, claiming they were never authorized.
A federal judge ruled for Chase, and the Philadelphia-based appeals court affirmed.
Chase has no duty to reimburse Azur for payments he already made, the court ruled, and Azur gave his assistant the "apparent authority" to use his credit card by continuing to make payments without reviewing the bank statements.
"[B]y identifying apparent authority as a limitation on the cardholder's protections ... Congress recognized that the cardholder is oftentimes in the best position to identify fraud committed by its employees," Judge D. Michael Fisher wrote.
"Here, Azur's negligent omissions led Chase to reasonably believe that the fraudulent charges were authorized."
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