The Banking Ombudsman has required a bank to reimburse a customer $26,000 plus interest over unauthorised uses of their bank card.

The customer did not use the card regularly and only noticed the transactions after five days. They informed their bank and the card was cancelled. The customer asked to be reimbursed for the misappropriated funds, but was told that since the correct PIN was used, there was nothing the bank could do.

The Ombudsman’s investigation determined that the bank had not fulfilled its responsibility to establish a breach of their terms and conditions, including a failure to take reasonable care of their PIN and card. The Ombudsman also criticised the internal investigation the bank undertook.

Upon acceptance of the Ombudsman’s findings, the bank reimbursed the customer $26,000 plus interest.

When providing services for customers banks are required to adhere to the terms and conditions stipulated in any agreement between the parties.

If there are concerns that a bank has breached its obligations toward a customer, it is prudent to consult an individual experienced in this area.




Alan Knowsley
Litigation Lawyer
Wellington