A person complained to the Banking Ombudsman after their bank refused to reimburse $95,000 that was stolen from their account by hackers.

After attempting to gain access to the claimant’s computer or phone, the hacker used a device to reset the customer’s internet banking password. They then used the new password to access the  account and transferred $95,000 out of it.

Neither the bank nor the police could recover the funds, so the claimant requested that the bank reimburse him, claiming that there was a security failure on their end. The bank refused, stating that the claimant should have taken further steps to protect his account, such as having password protection on his devices.

The bank also argued that the claimant had breached security guidelines by sharing his internet banking passwords with his family and accountant.

The claimant made a complaint to the Banking Ombudsman’s office, who have the power to resolve issues between banks and customers. The office said that the claimant was entitled to be reimbursed unless he had contributed to the loss, either by breaching the terms and conditions set out by the bank or failing to take reasonable steps to protect his bank details.

The office stated that the sharing of his passwords had no link to the $95,000 that was stolen, and so that did not contribute to the loss.

The claimant did not realise people could access his account through his devices without his internet banking password. However, the terms and conditions of the bank had nothing which stated the claimant was required to protect his devices with passwords, leading the office to find that it wasn’t a necessary step in assuring security.

The office decided that the claimant had not failed to take reasonable steps by not having password protected devices. The office also found that the bank’s own process for resetting passwords made people vulnerable to these situations, as this is what enabled the hacker to steal the customer’s money.

The office recommended that the bank reimburse the claimant $95,000 with interest, as well as an additional $3,000 for the stress and disruption caused by the bank’s failure to properly consider his claim.

If you have been treated unfairly and would like to know your options, 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