Bank acted quickly but unable to recover payments to fraudster

Common scams targeting bank customers,
A fraudster intercepted emails between Russell and his accountant. Impersonating Russell by email, the fraudster gave the accountant instructions to make two payments from Russell’s trust account. One was for $45,000 to an Australian bank account with Russell as the beneficiary, and the second was for $100,000 to a bank account in Hong Kong under a company name.
July 2020

Russell’s accountant discovered the fraud late on the day the second payment was requested. He contacted the bank by phone in an urgent attempt to stop the payment. The bank attempted without success to recall the payments the following morning.

Our investigation

We found Russell’s accountant was authorised to operate the account and his bank acted correctly on his instructions to make the payments. We also found no potential warning signs that indicated the bank might need to look into the transactions.

We consider banks should start recovery action for fraudulent payments within one business day of receiving notification of fraud at the latest. Russell’s bank attempted to recall both payments within that time. We found nothing to suggest the bank breached any duty or obligation to Russell or made any error and concluded the bank should not have to reimburse Russell.


Russell’s New Zealand bank credited him $300 to cover his transaction fees, and Russell withdrew his dispute.

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