Bank did not ask for consent before reversing transaction

Processing payments,
A person deposited $5,000 in Chantelle’s account for services she had provided. The next day, the payer said the transaction was unauthorised and asked his bank to reverse it. Chantelle’s bank agreed and reversed the payment without notifying Chantelle first or seeking her consent. The bank’s terms and conditions allowed it to reverse unauthorised payments.
June 2021

Our investigation

Chantelle and the payer disagreed about the circumstances of the payment. Chantelle said the payer authorised the payment using internet banking on his laptop and by inputting a  2FA (two factor authentication) code the bank sent to his mobile. She said she did not have the payer’s password or other banking details. The payer, however, said his user name and password were saved on the bank’s internet banking login page on his laptop. He said Chantelle had accessed his laptop to make the payment and accessed his mobile to get the 2FA code.

We considered Chantelle’s version more likely. We did not accept that his bank’s internet banking page allowed him to save both his password and username. Also, the payer would probably have breached his own bank’s terms and conditions if Chantelle had been able to access his password on his laptop. This means he couldn’t have claimed reimbursement for an unauthorised payment.


We arranged for the return of the $5,000, plus a payment of $500 to Chantelle for inconvenience.

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