Banks required to follow customers’ instructions

Common scams targeting bank customers,
Pierce, the owner of a building company, received an invoice from one of his sub-contractors, which he paid in the normal way. But the sub-contractor’s email had been hacked by a scammer, who had changed the bank account number, diverting the payment into a different account. The sub-contractor’s complaint about non-payment eventually revealed the scam. Pierce phoned his bank, which contacted the recipient bank, but by then the funds had been transferred overseas and were unrecoverable.
November 2018

Our investigation

Pierce said the bank should compensate him for his loss because he had been the innocent victim of a scam. He said the bank should have noticed the bank account number had changed and checked with him before sending the funds. We explained that a bank’s role is to pay the funds according to the instructions its customers provide, and there is no obligation on a bank to verify whether those instructions are correct before processing the transfer. 


We were unable to uphold this complaint because the bank had met its obligations by paying the funds according to the instructions.

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