Bank not obliged to monitor account from which brother took money

Categories:
Powers of attorney
Summary:
Daniel complained to the bank on behalf of his mother’s estate after learning that his brother, who was his mother’s attorney under a power of attorney provided to the bank, had withdrawn $120,000 for his own use over several years. Daniel said the bank knew his brother was his mother’s attorney and that he could access her account through an eftpos card issued to him and should have taken care to ensure her account continued to be operated in the same way as it had been prior to his appointment as attorney. He asked the bank to reimburse the money, but it declined to do so, saying the transactions had been authorised in accordance with the account’s mandate (that is, in accordance with who was entitled to operate the account). It added that it had no obligation to monitor the account. Unhappy with the bank’s response, Daniel asked us to investigate.
Published:
October 2021

Our investigation

Giving someone power of attorney over another’s person’s money is not without its risks. One such risk is that the appointed individual abuses the power for his or her own purposes. This was the case in all the transactions Daniel complained about. Banks are under no obligation to monitor customers’ accounts, even after an attorney is added to an account.   

Outcome

We did not uphold Daniel’s complaint.

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