Banks under no general obligation to monitor customer’s accounts

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Banks under no general obligation to monitor customer’s accounts

Categories:

Fraud & scams,

Summary:

Antoinette was the victim to an online investment scam. She sent $150,000, all of her savings, overseas via a New Zealand remittance company. As soon as she discovered the scam, she contacted the bank to try to retrieve the funds, but was unsuccessful. Antoinette complained that the bank should have identified that she was sending funds to a scam. The bank explained that it did not have an obligation to do this but offered her $1,000 in recognition of the fact she had been the genuine victim of a scam and had lost all of her savings. She did not accept the bank’s offer and asked us to investigate. The bank agreed to keep its offer available to Antoinette.

Published:

November 2021

Our investigation

Banks have no general obligation to monitor customers’ accounts to prevent them from giving their money to a scammer or making unwise decisions. Antoinette had properly instructed the bank to make payments to a legitimate remittance company, and the bank had followed those instructions. We told Antoinette we would not be able to uphold her complaint and she should accept the bank’s offer.