Bank fails to show evidence of any breach of terms and conditions

Account information,
In late 2020, Phoebe’s daughter gained unauthorised access to her phone banking and stole $8,600. Phoebe became aware of this the next day and complained to the bank. The bank said it was a matter between her and her daughter, and that she should lodge a complaint with the police, which she did. She then complained to the bank that it had allowed her account to be compromised. The bank replied that her daughter had used her phone banking details, including her PIN, and had used them correctly the first time. It said it would not reimburse Phoebe because it considered she had either disclosed her PIN to her daughter or selected an unsuitable PIN, in breach of the terms and conditions of her account. Phoebe was dissatisfied with this response and asked us to investigate.
October 2021

Our investigation

The bank’s terms and conditions stated that Phoebe would not be liable for any loss resulting from unauthorised transactions on her telephone banking unless she had acted dishonestly or negligently, failed to take reasonable steps to protect her banking, or had breached the bank’s terms and conditions.  We found nothing to suggest Phoebe had disclosed the PIN to her daughter or had written it down.  We were also not satisfied that Phoebe’s PIN was unsuitable as defined by the terms and conditions (it was a PIN using personal information or sequential numbers). We also found that the bank did not have information to show that the PIN was entered correctly on the first attempt as the bank claimed.  The information showed it had been entered correctly within three attempts.  While this indicated it was likely guessed, it was not evidence it was known to her daughter. 

 There was also nothing to indicate Phoebe had acted negligently or had not taken reasonable steps to protect her banking. In fact, she had no payees set up on her telephone banking (which meant that if anyone accessed her phone banking, they could not use it to make a payment to themselves).  We discovered that her daughter had been able to make payments to herself because she had called the bank to be added to Phoebe’s phone banking as a payee. We listened to this call and considered the bank had not taken reasonable care in following the daughter’s instructions: the instruction exposed Phoebe to a loss through her phone banking, but the bank did not ask additional security questions even though the call came from a blocked number. 


The bank repaid Phoebe $8,600.                          

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