The Banking Ombudsman has required a bank to pay $30,000 to a customer after two unauthorised transactions. The customer gave his nephew his banking details, to personal and trust accounts, in order to purchase a property. The nephew, without permission, removed $115,000 from the accounts.

The bank determined the customer was liable for this loss as they had given out their banking details. The money was recovered by the customer privately, but several months later the nephew took a further $45,000.

The customer complained that the bank had given the nephew access to mobile banking, and failed to take steps to secure the accounts after the initial breach.

The Ombudsman determined that the customer had not authorised the nephew’s phone number to be registered against the accounts. Additionally, it decided the bank should have taken further steps to secure the customer’s accounts after the initial unauthorised transfer, including contacting the customer directly and resetting the account login information.

However, by providing their details to the nephew, the customer was also partially liable for the loss. It was proposed the bank pay two thirds of the loss and the customer one third. This outcome was accepted.

Banks are required to take reasonable care in protecting their clients’ accounts and authorising changes to access. If you think a bank has failed to take reasonable care in providing banking services to you, it is a good idea to get advice from someone experienced in this area.




Alan Knowsley
Litigation Lawyer
Wellington


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