Bank reimburses customer $56,000 transferred out of account by his son...

The Banking Ombudsman has found the bank at fault for their customer’s son being able to transfer $56,000 out of his account through mobile banking. 

The customer’s mobile banking was accessed by his son using the customer’s phone password. The son went into the customer’s phone settings using his phone password and then added his face ID to the device. 

The son was then able to access the mobile banking app through the face ID function. Over 26 transactions, the son transferred $56,000 out of the customer’s account. 

The customer complained to the bank but they refused to reimburse the loss. The customer then complained to the Banking Ombudsman. 

The Ombudsman outlined that customers must take all reasonable steps to protect their banking, including their banking information.

The Ombudsman found that this did not extend to a requirement for customers to protect their device passwords.

The Ombudsman found that the bank should have required further authentication steps for the mobile banking app than only the face ID function. For example, some banks disable face ID login for their mobile banking app and require a separate PIN be set up for the app. 

The bank had therefore not kept the customer’s banking methods secure, and the bank breached their obligation to the customer. The bank’s terms and conditions did not provide any requirements for customers to keep their device passwords safe. 

The Ombudsman upheld the customer’s complaint, and the bank reimbursed the customer the full $56,000. 

This case is an important reminder to keep your banking information safe, including your device password. This is increasingly important as online scams become more popular. 

If you believe you have been treated unfairly by a bank 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.