2015 - 2016

Bank accounts

Savings account

Ms Y’s bank conducted a review of her accounts to meet new anti-money laundering legal obligations.  Her identification had expired so the bank requested more identification and information about the source of funds in her accounts.  She didn’t provide this, and the bank suspended her accounts for seven months.

Ms Y believed the withholding of her funds was unlawful, and that she had suffered inconvenience by not having access to her funds.

We found the bank had initially acted appropriately in suspending Ms Y’s accounts. This was because her contract with the bank allowed it to suspend an account in circumstances where a customer did not provide certain information.  It had also warned Ms Y what would happen if she did not comply with its information request.  

However, we found the bank was not entitled to suspend the account indefinitely. Such a suspension is a temporary measure only. In the circumstances, we considered the bank should have taken steps to close the accounts and return Ms Y’s funds five months before it did. 

Our view was that Ms Y had suffered inconvenience by not being able to access her funds for that time. We recommended the bank pay Ms Y $500 inconvenience compensation.

See our Quick Guide on Anti-money laundering legislation – changes to banking for more information.