The Banking Ombudsman has recently decided that a complainant was not liable for giving her online banking details to a scammer, which led to her losing $28,505.

The complainant received a text stating that there had been unusual payment attempts on her card and to click on a link. The text looked like it was from the complainant’s bank.

The complainant had been attempting to set up the card that morning and was concerned that someone had accessed her details. The link took her to a page that looked like her bank’s login page, where she entered her name and password.

She soon received confirmation codes via text, which she then put into the login page. However, the complainant did not realise that this gave the scammer access to her online banking on another device.

The bank called the complainant the following day, after the scammer had spent $28,505 from her account. The bank could only recover $4,490 and refused to reimburse the complainant the balance of $24,015.

The Banking Ombudsman had to determine whether the complainant should be liable for giving the scammer access to her online banking.

“The Code of Banking Practice requires banks to reimburse unauthorised online transactions unless customers have acted dishonestly or negligently, breached the terms and conditions of their accounts or cards, or failed to take reasonable steps to protect their banking details.”

The bank argued that the complainant had breached her terms and conditions by entering her account details into a fake website. However, the Ombudsman disagreed.

In this case, the complainant was unaware that she was giving her banking information out to another person, nor did she intend to disclose her information to anyone. Further, the text from the bank regarding authentication codes had not been clear that the codes were to set up online banking on a new device.

The Ombudsman concluded that the complainant could not have reasonably known she was giving her information to the scammer. Rather, she believed she was entering her details into a genuine bank website.

The Ombudsman agreed with the complainant that she should be reimbursed the full amount. The bank agreed to pay the complainant the balance of $24,015.

It is important to be aware of your financial obligations when it comes to your bank account. If you are confused about these obligations or believe you have been treated unfairly, it pays to seek advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.

Alan Knowsley and Hunter Flanagan-Connors