Complaint was about a commercial decision and therefore outside our scope

Account information,
Elsdon applied to open an account with the bank and borrow money to buy a house. The bank rejected the application. It said it had closed an account of his in 2006 and placed a warning note on his file because of “fraudulent activity”. The bank said two customers at other banks had filed complaints with the police about money they had paid to Elsdon, and they had sought reimbursement of their funds. Elsdon said he was unaware of any police complaints and had not stolen anyone’s money. Rather, he had been the victim of a “mule” scam. Despite Elsdon’s explanation, the bank still refused to open an account or lend him money. He complained to us that the bank was holding him responsible for a crime he did not commit and was not exercising its commercial judgment reasonably or in good faith. He also wanted us to challenge the bank about the contents of diary notes it had made about the alleged fraudulent activity.
October 2021


Our investigation

We considered Elsdon should have complained about the circumstances of the account closure back in 2006, not 15 years later. So much time had elapsed that we could not look into whether the bank had followed a fair procedure in closing his account. We did, however, find that the bank acted appropriately in taking the diary notes into account in deciding not to open an account for him or lend him money. We also found that this decision was an exercise of its commercial judgment, a matter we do not have the power to review. Nor do we have the power to require banks to amend notes made by staff of their interactions with customers. However, we told Elsdon he could ask the bank to make a correction to the notes under the Privacy Act 2020, and that he could ask the police whether they held any information about the alleged fraudulent activity.


We did not uphold Elsdon’s complaint.                                 

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