Bank not responsible for payments to scammer

Common scams targeting bank customers,
A social media site persuaded Jasmine to send almost $80,000 overseas in order to claim a $US200,000 lottery prize. She sent the money to the fraudster as three international money transfers via branches of her main bank. The bank became suspicious when she tried to make a fourth transfer of $10,000 and declined the request.
February 2021

Jasmine was unhappy with this and went to her other bank to send the funds overseas. However, she later discovered the fraud. She engaged an online recovery company to help with her complaint about her main bank. She said the bank should have sought a chargeback, adding that she had told the branch she was sending funds overseas for a lottery and that the bank should have noticed this was a scam and blocked any transfers.

The bank attempted to recall the funds but was unsuccessful. It declined to compensate her for her losses, but made a goodwill payment of $1,600 (which appeared to be compensation for the fees she had paid the online recovery company, which the bank told Jasmine operated in much the same way as a scam). Jasmine maintained the bank should have stopped all payments and asked us to investigate.  

Our investigation

We discovered Jasmine had not told the bank she was sending funds to claim a lottery prize. She said the fraudster had coached her to not tell the bank why she was sending the funds overseas and acknowledged she did not give the bank correct information. Instead, she said she was buying supplies for a wedding planning business. This was consistent with the information recorded on the transfer forms and the recollections of the bank tellers who processed the transfers.

We also looked at whether there was anything that should have raised the bank’s suspicions that Jasmine was the possible victim of a scam. Diary notes showed the bank had questioned her about the first transfer because it was an unusual transaction for her. However, she had explained that it was for the purchase of supplies for her business: the bank knew she ran a wedding planning business and she had shown the bank photos of venues she had decorated. It was not until the fourth transfer that her story became inconsistent and the bank declined to move the money. 


We said the bank was not responsible for Jasmine’s losses.

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