A bank has offered a $5,000 settlement to a customer following an investigation by the Banking Ombudsman.

The customer and another family member were involved in a partnership. A dispute broke out and the family member threatened to freeze the business account.

The customer contacted their bank and was told that authority of two or more signatories was required to freeze the account. However, the bank did not tell them that it could also freeze the account on the instruction of one account holder.

The other family member froze the account. This led to interest being accrued on a loan and potential losses of income due to being unable to complete projects.

The bank offered $5,000 compensation for the inconvenience. The Ombudsman agreed the sum was reasonable in the circumstances, given the bank could have frozen the account regardless, had they been aware there was a dispute.

Banks have an obligation to provide their customers with correct and up to date information about their practices. If you have acted on information provided by a bank to your detriment, it is wise to consult a professional experienced in the area.

Alan Knowsley
Litigation Lawyer