A bank has settled with the parents of a customer after their child was able to withdraw $3,000 from an account without the proper parental authorisation.

The parents had discussed the best options with their bank for setting up an account for their child. The bank suggested a trust account, as it would require authorisation from either parent before any money could either be deposited or withdrawn.

However, as the result of a bank error, the child was able to withdraw $3,000 from the account without the authorisation of either parent. The bank offered compensation of $250 to the parents, which was rejected. The parents complained to the Banking Ombudsman.

The Ombudsman discussed the matter with the bank. The bank increased their offer to $1,500. The parents agreed their child was partly responsible for the loss and accepted the offer.

Banks are responsible for losses due to mistakes and errors caused by their systems and staff. If you believe that you have suffered a loss due to a bank’s mistake, it is wise to discuss your options with a professional experienced in the area.

Alan Knowsley
Litigation Lawyer