Martin v. Fifth Third Bank, et al 2026 IL App (1st) 250705
On February 3, 2026, the Illinois Appellate Court In Martin v. Fifth Third Bank (First District) reversed the dismissal of a negligence claim against the bank and held that Illinois courts must analyze a bank’s potential duty to a noncustomer under the state’s traditional four-factor duty test—not by applying a categorical “no duty to noncustomers” rule drawn from federal cases. The court reversed and remanded a section 2-615 dismissal of Marsha J. Martin’s negligence claim against Fifth Third Bank, concluding the circuit court applied the wrong legal standard by relying on federal authority stating banks owe no duty to noncustomers .
What Happened
Martin, a Wells Fargo customer, was duped by a fraudster (a Fifth Third accountholder) into wiring money to his Fifth Third account after he allegedly hacked a contractor’s email; the funds were withdrawn and not recovered. Martin alleged Fifth Third knew the accountholder had repeatedly used his accounts to defraud others but failed to close, freeze, or monitor the accounts or implement adequate safeguards . The trial court dismissed with prejudice, reasoning Illinois law imposes no duty of care from a bank to a noncustomer..
The Appellate Court’s Key Rulings
- Duty framework: Illinois courts must assess duty using four factors—foreseeability, likelihood of injury, the burden of guarding against the injury, and the consequences of imposing that burden—rather than adopting a blanket no-duty rule for banks and non-customers. The court rejected Federal cases that had assumed Illinois law provides that a bank has no duty of care to a non-customer.
- Application here: The court held Martin might be able to plead a duty under this test, but her complaint needed more specific facts (particularly on foreseeability and on the burden/consequences of additional safeguards), so she must be allowed to replead.
- Limits of the decision: The court did not decide whether Fifth Third ultimately owes a duty, only that the claim should not have been dismissed with prejudice under the incorrect legal standard .
Why It Matters
- For consumers and businesses: The decision confirms that, in Illinois, victims of wire-fraud schemes involving a perpetrator’s bank account may pursue negligence claims against the bank if they can adequately plead the four duty factors with concrete facts. Generalized allegations will not suffice.
- For banks: Illinois courts will look beyond customer status and examine foreseeability and operational burdens; banks may need to safeguard accounts and funds from fraud where the burden to do so is not overly burdensome.
- Litigation posture: Expect more fact-intensive pleading and motion practice focused on what the bank knew or should have known about suspicious account activity, the practicality of safeguards, and any consequences of imposing those safeguards.
Practical Takeaways
- Plaintiffs should: Allege specific, nonconclusory facts showing what was apparent to the bank at the relevant time (e.g., prior incidents, notices, patterns), and address the burden and consequences of proposed fraud-prevention measures. In particular, allegations based on “information and belief” should include what investigation showed to create that belief.
- Banks should: Evaluate and document fraud-monitoring practices and decision rationales, as courts may scrutinize whether feasible safeguards were available without undue burden.
The Bottom Line:
The decision in Martin v. Fifth Third Bank realigns Illinois bank-negligence pleadings with the four-factor duty analysis, irrespective of whether the plaintiff was a customer of the bank. In the process, this case may lead to more extensive—and more costly—safeguards to protect funds from fraudulent wire transfers.
