Customer partially reimbursed after giving banking codes to scammer...

A bank has recently only partially reimbursed a customer after an internet banking scam led to $42,000 being transferred out of his account.

The customer received an automated voice message from someone purporting to be a fraud officer for his bank. The person told the customer that they were investigating an unusual transaction from his credit card.

The customer eventually gave the scammer bank codes that had been sent to his phone by his bank, after the scammer told the customer he was helping the bank detect fraudsters.

The person used the bank codes to reset the customer’s password and transfer $42,000 from his account. The customer immediately told the bank, but they were only able to recover $12,000. The bank refused to reimburse the remaining $30,000 to the customer.

The customer made a complaint to the Ombudsman, arguing that the bank should reimburse him the full amount.

The bank argued that they did not have to reimburse the man as he had breached their terms and conditions by giving out his bank codes, and/or had failed to take reasonable steps to protect his details.

The Ombudsman found that the scammer had changed the customer’s password using the codes sent to the customer by text message from his bank.

However, the text messages from the bank had not notified the customer that the codes would enable his internet banking password to be changed.

The Ombudsman found that it was reasonable for the customer to give the scammer those codes during their early interactions, as a reasonable person would not have suspected they were being scammed.

However, the customer also gave the scammer his credit card details and other text message codes.

The Ombudsman concluded that those details went a step further, and a reasonable person would have realised they were being scammed at that point.

The Ombudsman informed the bank that they should provide customers with information where a code could be used to reset their banking passwords. The bank accepted this, and offered to reimburse the customer part of the $30,000.

The customer cannot recover the full amount lost to the scammer from the bank.

It is important to be aware of your rights and obligations as a banking customer. If you believe that 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