She transferred a further $US40,000 to the trading account. The bank noticed the transfers and called Eleanor to check the legitimacy of the transfers. Once more, Eleanor assured the bank she wanted the payments made and understood the risks involved. Unfortunately, Eleanor lost most of the money in bad trades.

Eleanor complained that the bank should have been aware it was a scam operation, and also should have responded to her email. Had it done so, she wouldn’t have transferred the further $US40,000. Based on this, Eleanor requested compensation from her bank.

The bank declined because it had verbally warned her about binary trading during the time she had been sending the trader money. The bank said Eleanor should have first looked into the risks of dealing with binary traders. As such, the bank considered it was not responsible for her losses, but it offered her $NZ1,000 in recognition of their longstanding relationship.

Our investigation

The bank should have responded to her email, but it had warned Eleanor verbally – both before and after she sent the email – about the risk of binary traders. Furthermore, Eleanor said in her email that she did not intend to send further funds to the trader until she received a response from the bank. However, within a day of sending that email, Eleanor transferred $US10,000 to the trader and later contacted the bank to arrange international money transfers to the trader. It therefore didn’t seem that Eleanor was relying on the bank’s email response before sending funds.

Based on these findings, we could not see that the bank was responsible for Eleanor’s loss.

Outcome

Eleanor accepted the bank’s offer of $1,000.