Bank not liable for lost interest on uninvested funds...

The Banking Ombudsman has held that a bank is not liable if a customer neglects to place funds on deposit when term deposits mature and the funds are returned to the customer’s non-interest earning account. 

The funds had sat for almost two years without earning any interest, but the Ombudsman held that the account owner should have checked their accounts and the onus was on them to re-invest the funds rather than on the bank to do so.

The lost interest during the two years the funds sat without earning interest was around $30,000 and the bank offered a goodwill payment of $4,000 because of the long relationship with the customer.  This was accepted by the customer.

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Alan Knowsley
Wellington