Bank failed to show breach of card’s terms and conditions

Account information,
Michael learned someone had used his debit card to spent $26,000 over five days. When he went looking for his card and discovered it was lost, he notified his bank, which cancelled the card.
February 2019

Michael sought reimbursement of the $26,000 from the bank. But the bank said the offender had used his PIN correctly, and it could not therefore help him. It referred him to the police, who were able to establish that the offender was a neighbour, who had subsequently disappeared. 

Michael went back to the bank, but it continued to decline liability and carried out no real investigation into Michael’s statement that he had not disclosed his PIN. He then brought his case to us.  

 Our investigation   

There was no question Michael had not been the person who carried out or authorised the transactions. We were not satisfied the bank had discharged the onus on it to show Michael had breached the terms and conditions of his card by failing to take reasonable care of it and his PIN. 

Michael had occasionally driven the neighbour to the supermarket, and she might have overlooked him entering his PIN. Furthermore, we were satisfied it was reasonable for Michael not to have noticed his card was missing for five days, given the usual pattern of use of his card. 

We recommended the bank reimburse the loss. We were also critical of the bank’s failure to consider what the terms and conditions stated about liability during its internal investigation of the complaint. 


Both Michael and the bank accepted our view, and the bank reimbursed $26,000 plus interest. The bank said it planned to make process and training changes as a result of the complaint.

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