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Before the Series
Originally from Texas, Ian Banks attended high school like any other teenage kid. In this time, he got a girlfriend called Maggie Watterson. During their time together, Ian and Maggie talked about how they would spend the rest of their lives together and they were very much in love.
One night, he and his girlfriend went for a drive together in his dads car, something Ian was not permitted to do by his father. They began speeding in the car and he lost control on a slippery piece of road. The car crashed, and Ian got out of the car safely, but then panicked as he saw Maggie covered in blood; dead.
Maggie's parents blamed Ian for the accident and Ian became wracked with guilt, never getting over the death of his girlfriend. He blames himself for betraying the trust he had in her as it was him that crashed the car, speeding and consequently killed her.
Peyton Sawyer is a beautiful blonde girl in high school who, because of a complicated past, does not know much about her family background. Peyton has a web cam that is on at all times, filming her from her bedroom. Ian watches her from her website under the screen name "WATCHMEWATCHU" . Even though Peyton receives several IM's from him, she is afraid and is not sure of who it is. At first, Peyton Sawyer thinks it is Ellie, her biological mother. Ellie does not admit to being Peyton's mother when they first meet, which leads Peyton to believe that Ellie is a stalker.
Peyton finds a note in one of her music records telling her she has a half-brother named Derek, but when she calls him, he hangs up on her. She then uses her MySpace page and web-cam to reach out to him, and Ian sees it and decides to pretend to be her brother. He goes to Peyton's house, but as revenge for hanging up on the phone call, she slams the door on him. Peyton later decides to give him a chance and meets him at Karen's Café with Lucas Scott as back-up. As "Derek" and Peyton grow closer, Lucas begins to think that there is more than meets the eye with "Derek", especially after "Derek" sniffs Peyton's hair while hugging her. Lucas's doubts are confirmed when "Derek" steals Peyton's jacket and hires a prostitute to dress up as her, whom Lucas later meets at a hospital.
Peyton begins to think that Lucas might be right and goes to her "brother's" room, and has her suspicion confirmed when she discovers a message on his computer screen spelled "yy" instead of "y", just like in one of the messages from "WATCHMEWATCHU". He had also had the screen name as "Lukescott3" pretending to be Lucas. Seeing he has lost Peyton, the stalker tries to rape her, revealing he has been "WATCHMEWATCHU" and "Lukescott3" all along. However, he is stopped by Lucas and the real Derek. He manages to escape, but is later supposed to have been caught by the police, to Peyton's relief. Peyton is unaware that he is the one to call her and announce it, though.
"Psycho Derek" — as he is referred to by Peyton — later shows up on prom night right before Lucas comes to pick her up and locks her in her basement to set a "perfect" prom for them. Brooke Davis' arrival causes this incident to take a turn for the worse.
"Psycho Derek" decides to try and kill Brooke since Peyton has said she is dead to her, but Peyton tricks him into untying her and stabs him instead. She then fights him, but he gains the upper hand and intends to rape her. However, Brooke comes to Peyton's rescue. The girls then defeat him together and he is taken away by paramedics.
Later, Peyton goes to visit him in prison. He claims that she is a tease who enticed him to go after her. Not long afterwards, she and Brooke discover the truth about his past. It is revealed that his real name is Ian Banks. They learn that his girlfriend Maggie, who looks eerily like Peyton, perished when they were involved in a car accident. Devastated by her death and her parents' accusation that he held full responsibility, Ian appeared to have become unstable, thus resulting in his traumatizing relationship with Peyton, most likely choosing her because he was trying to find his dead girlfriend in someone else who looks like her. Peyton tells him that both she and Maggie forgive him, but that neither Brooke nor herself will ever see him again. Later, Ian is seen looking at a photograph as he cries, presumably now coming to terms with his past.