The Banking Ombudsman has found a bank at fault after its customer’s husband forged her signature on a loan document for $135,000.  The bank had originally claimed that the signature was genuine and the husband had acted under a power of attorney granted by the wife to him.  However, upon investigation, it transpired that there was no power of attorney and that the signature had been forged, either by the husband or by the bank officer who approved the loan.

The husband used the loan to complete a house that he and his wife were building and so the wife had gained some benefit from the loan.  The Ombudsman ordered the bank to repay half her share of the loan.  The Bank was therefore liable to repay her $32,500 for the loan and it was also ordered to pay her $16,750 in interest for money she had to borrow to pay back the bank. It was also ordered to pay her $23,782 legal costs that she had incurred in disputing the loan through the Family Court when her and her husband separated.  In addition the bank was ordered to pay her $6,000 compensation for stress and inconvenience.  The total that the bank agreed to settle for was just over $79,000.

This case is another example of the customer originally being fobbed off by the bank, but persisting with her complaint and the Banking Ombudsman investigation finding in favour of the customer.

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Alan Knowsley
Wellington


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