In January 2023, Venky Venkatraman was persuaded by scammers to deposit money orders and cashier’s checks totaling $94,345 into various Bank of America accounts. He sued the bank for fraud and negligence, and after removal to the Northern District of Texas, his amended complaint asserted negligence, negligent enablement of fraud, breach of contract, breach of fiduciary duty, and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (“DTPA”). The district court dismissed with prejudice, and in Venkatraman v. Bank of America, N.A., No. 25-10969, 2026 WL 1008501 (5th Cir. Apr. 14, 2026) (per curiam), the Fifth Circuit affirmed on every point. This was a pro se Plaintiff and different facts could lead to a different result.

The court held that the bank owed no duty of care to prevent third parties from carrying out fraudulent transactions through their own accounts, reasoning that such injuries are not foreseeable and that neither Venkatraman’s longtime customer status nor his later contact with the bank changed that result. His contract claim failed because he identified no specific contract or breached provision, and his fiduciary-duty claim failed because an ordinary bank-customer relationship creates no fiduciary duty under Texas law. His DTPA claim failed because he was not a “consumer” and did not plead with the required specificity. Finding he had already presented his “best case,” the court held dismissal with prejudice was not an abuse of discretion.

Why This Case Is Important to Financial Institutions
This decision reinforces favorable authority for banks facing a growing category of litigation: claims by customers who fall victim to scams and then seek to shift their losses to the bank that processed the transactions. The Fifth Circuit confirmed that the ordinary bank-customer relationship does not, standing alone, create a duty of care or fiduciary duty to detect or prevent third-party fraud, and that such losses cannot be readily repackaged as negligence, contract, or consumer-protection claims. By foreclosing each of the theories fraud victims commonly advance, the opinion gives institutions strong support for early dismissal—and underscores the value of clear account agreements and ongoing customer fraud-awareness efforts.

No information in this communication is intended to constitute specific legal advice.  For specific legal advice, please contact an attorney, and if you have any such questions or would like more information about this issue, please contact William “Pat” Huttenbach at 713.752.8616, or email at phuttenbach@craincaton.com.

Thanks,

Pat

William “Pat” Huttenbach | Shareholder | Banking Litigation
Crain Caton & James | Attorneys & Counselors
Five Houston Center | 1401 McKinney St., Suite 1700
Houston, TX 77010
Direct: 713.752.8616 | Fax: 713.658.1921
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COI Venkatraman v. Bank of America