Banks Face Legal Battle After Elderly Dementia Patient Loses $330,000 in AI-Assisted Romance Scam

An elderly Pennsylvania man with dementia lost $337,000 after a Cyprus-based fraud ring manipulated him through an AI-assisted fake romance. The case raises questions about whether protections for unauthorized transactions under the U.S. Electronic Fund Transfer Act and Regulation E extend to customers who were deceived and cognitively impaired.

A March 6, 2026, report said PayPal and Woodforest National Bank issued refunds after investigating. Five other banks — Barclays, Citizens Bank, Goldman Sachs, JPMorganChase and USAA Federal Savings Bank — maintain that the transfers were authorized by the customer and are engaged in a legal dispute over liability for compensation.