Legal Question in Banking Law in Massachusetts

credit fraud

I had a business line of credit that was not closed when I went to the bank to close all accounts because I sold my business to someone else and 3 months later the bank gave the money from my credit line to the new owner of the business without my permission and now the new owner of the business is not paying back the money and the bank is now after me to pay back the money. How can I be responsible when the bank is the one who was negligent in not verifying that the new owner had no right to borrow money that was lent to me? What are my legal rights?


Asked on 5/22/08, 2:55 pm

1 Answer from Attorneys

Re: credit fraud

If this is a case of identity fraud (ie - new owner posing as you and forging signature) then ti should be easy to resolve - file criminal complaint with police. If this is a new owner of a corporation and the line of credit was issued to the corporation, then it may be another matter. The form of the business (was it a d/b/a or corporation?) will drive the analysis, as well as whether the line of credit was issued to you personally, to a corporation, and whether there were any personal sureties.

In any event, it is clear that you can take action against the new business owner to recover any monies owed you or for damage to your credit.

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Answered on 5/22/08, 3:56 pm


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