2015 - 2016

Payment systems

Cheque

Ms Y attempted to cash an open cheque for $800 at her local branch. A staff member asked her for identification. Ms Y refused, believing the bank had no right to this information in order to cash an open cheque. The bank declined to cash the cheque, explaining that its policy required those presenting such cheques to supply identification. 

Ms Y complained to us, saying there was no legal requirement to supply identification when presenting cheques of less than $1,000, and the bank was unlawfully collecting information about her.

We considered that the bank’s policy was not unlawful. The Financial Transactions Reporting Act 1996 requires banks to verify the identity of those conducting certain transactions. In the main, this relates to transactions involving $10,000 or more, but it does not prevent a bank from verifying the identity of those conducting transactions involving lesser amounts.

Also, the Privacy Act 1993 allows an agency to collect personal information for a lawful purpose. We consider the detection or prevention of fraud to be such a purpose. The bank’s policy can help prevent both the bank itself and its customers from suffering losses as a result of fraudulent activity. 

We declined to uphold the complaint.