Decision in favor of a bank probably made by AI has been overturned in Brazil
Great hopes begin with small decisions.
Some time ago, I was hired by a client who was the victim of a financial scam. Using social engineering and sophisticated technological resources, a gang invaded and controlled her smartphone and stole approximately 10 thousand dollars from two of her bank accounts. She is elderly and at the time of the events she was especially vulnerable due to a serious illness.
The two lawsuits were dismissed by different judges for the same reason. The judges understood that the fault lay with the client and not with the banks. The fact that she was elderly and ill was disregarded as being irrelevant, so I appealed one of the decisions. The other lawsuit was not appealed because the client became discouraged and preferred not to pay the due court fee.
On September 26, 2024, the appeal in the lawsuit filed against Banco Sofisa S/A was judged in the Court of Justice of São Paulo. Below I transcribe the summary of the judgment:
"APPEAL. “False Central Scam”. Plaintiff, an elderly woman, claims to have received a call from a fraudster who pretended to be a bank employee and informed her that she needed to install the “Rust Desk” application on her cell phone. She followed the instructions given and subsequently noticed several improper transactions in her account. Typically fraudulent transactions that were out of line with the customer profile. Consumer relationship characterized (articles 2 and 3 of the CDC*). Lack of evidence to support the caution and adoption of sufficient security procedures to prevent the occurrence of fraud. Internal fortuitous event evidenced. Theory of activity risk. Objective liability. Need to repair the material damage caused to the plaintiff. Moral damage also established. Compensation set at R$5,000.00. Sentence reformed. Plaintiff's appeal granted."
In the body of the decision, the grounds for the claim were set out as follows:
“It is undisputed that the plaintiff was a victim of the well-known “Fake Central Scam”. She said she had been contacted by a third party posing as an employee of the defendant and informing her that she needed to install a new application on her cell phone. She followed the instructions and subsequently found several irregular transactions in her account, such as withdrawals, PIX and loans, resulting in a loss of assets in the amount of R$21,898.80.
The legal relationship of consumerism between the parties is undisputed, making the provisions of Law No. 8,078/90 - Consumer Protection Code applicable. The matter has been settled by Summary 297: “The Consumer Protection Code is applicable to financial institutions.”
In fact, since this is a consumer relationship and the defendant bank is the contractual party that holds the monopoly of information, data and documents, the hypothesis is that the burden of proof is reversed in favor of the consumer (art. 6, item VIII, Law No. 8078/90), who is the party at a clear disadvantage in the business relationship.
It is up to the banks, in partnership with the rest of the service provider chain, to verify the suitability of the transactions, using means that make fraud and transactions carried out by strangers on behalf of their customers difficult or impossible, regardless of any act by the consumer.
The vulnerability of the banking system, which allows transactions that appear to be illegal and completely at odds with the customer's profile, violates the security duty that is incumbent on financial institutions and, therefore, incurs a failure to provide the service under the terms of article 14, § 1 of the CDC*: “the service is defective when it does not provide the security that the consumer can expect from it (...).”
Even if there was action by a third party or if the plaintiff was naive in falling for the aforementioned scam, article 14, § 3, of the CDC* requires exclusive fault of the third party or the victim to eliminate the defendant's liability, which does not occur in the case at hand, since the fraud was only committed due to the technological apparatus made available to the consumer by the bank, which facilitated the offender's action, in addition to the evident security failure of the financial institution, which did not even contact the plaintiff to confirm the transactions now contested.”
The final part of the ruling was worded as follows:
"In view of the above, by my vote, I GRANT the appeal to judge the action as admissible and: 1- declare null and void the financial transactions mentioned in item IV of the initial claim; 2- order the defendant to refund the plaintiff the amounts unlawfully discounted from her account, with monetary correction of the disbursement (Summary 43 of the STJ) and interest on arrears of the citation (Summary 54 of the STJ), pursuant to article 406 of the Civil Code, with the amendment introduced by Law 14.905/24, as of its effective date; 2- order the defendant to pay the plaintiff, as compensation for moral damages, the amount of R$5,000.00, with monetary correction of the publication of this ruling (Summary 362 of the STJ) and interest on arrears of the citation (Summary 54 of the STJ), pursuant to of article 406 of the Civil Code, observing the modification introduced by Law No. 14,905/24, from its effective date."
The expenses with the legal proceedings will also have to be reimbursed by the Bank. Now the following will happen: first the Judgment will be published, then the Bank will have 15 days to appeal to the Superior Court of Justice. If the appeal is filed, the case will eventually be tried again by the higher court.
When there is no longer any appeal, I will execute the sentence and at the end the client will receive what is due minus the attorney fees that were contracted based on the result.
An interesting observation needs to be made here. In the appeal filed, I alleged a preliminary issue regarding the nullity of the original first instance decision. The ruling against my client's interests had been partially issued by an Artificial Intelligence. This issue was mentioned in a previous publication (text in Portuguese).
The high probability of the judge using AI was confirmed by the analysis that ChatGPT made of the relevant fragment of the ruling. Neither the Brazilian Constitution nor the civil procedural legislation authorizes judges in my country to transfer to a robot the power/duty granted to them to issue judicial decisions. Therefore, the ruling could and should be annulled.
However, the embarrassing issue of the nullity of the original ruling because it had been partially issued by an Artificial Intelligence was avoided. The Court of Justice of São Paulo chose not to consider the matter. Since my client was victorious on the merits and will be reimbursed and compensated, this omission in the ruling no longer has legal relevance and cannot be the subject of Clarification. In any case, this time the pro-business-as-usual robot judge’s position did not prevail.
If my client had not been discouraged, if she had believed in my work and paid the cost of appealing the other case, both cases could have had the same favorable outcome. But that is in the past now. That unfavorable decision in the other case can no longer be appealed because it has become immutable.
As a lawyer, I am very pleased when a case like this (involving a vulnerable and sick elderly woman) receives an adequate resolution. That is why I became a lawyer in 1990. This was a small victory, but I consider it very fair and hopeful. In this case, the interests of the technologically careless bank did not prevail.
*CDC: Portuguese acronym for the Brazilian Consumer Protection Code.
Congratulations🥳