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Bank error led to child withdrawing $3000

Categories:
Children's accounts
Summary:
Hana and Tony wanted to open an account for their 14-year-old son, and told the bank they wanted to limit the amount he could withdraw from it. The bank said a trust account would best suit their needs. The account's terms and conditions clearly stated that a parent or guardian of any child under 15 had to sign all deposit and withdrawal slips unless the parent or guardian gave the bank an indemnity allowing the child to access the account. On the basis of this information, Hana and Tony opened a trust account without providing an indemnity.

As a result of a bank error, their son was later able to withdraw $3,000 without authorisation from either parent or a designated guardian. Hana and Tony complained to the bank, which offered compensation of $250. They did not accept the offer, considering it unrealistic and an insult, and complained to us.

Our investigation

They accepted that their son was partially responsible for the withdrawal, but considered the bank was also at fault by failing to set up the account in accordance with the applicable terms and conditions. After we discussed the case with the bank, it offered $1,500, half of the loss suffered.

Outcome

Hana and Tony accepted the offer.

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