Bank liable for only those transactions made after being told of customer’s death

Deceased customers' accounts, Cards and PINs,
Kitty lived in a resthome and had not used her eftpos card since early 2018. In early 2020, her eftpos card fell into the hands of fraudsters, and throughout that year, they took $60,000 from her account via ATM withdrawals and eftpos transactions.
March 2022

Kitty, who was unaware of the transactions, died in late 2020. Two weeks later, her family became aware of the fraud and met the bank. Further transactions totalling $9,700 were made after the family notified the bank of Kitty’s death (including transactions that caused her account to become overdrawn).

Her family believed the bank should have detected that it was not Kitty making the transactions because her account pattern had changed dramatically – from no transactions to numerous daily transactions up to the maximum daily limit in a pattern typical of a fraudster using a card. The family complained that:

  • The bank had inadequate fraud detection and security systems.

  • The bank had flawed credit management.

  • The bank conducted an inadequate and flawed fraud investigation.

  • The bank treated the family poorly throughout the investigation process.

Our investigation

Banks do not have a general obligation to monitor customers’ transactions or to prevent them from making unwise decisions. Generally speaking, banks assume the customer is making the transaction if the customer’s credentials are used. In Kitty’s case, bank records enabled us to establish that the correct PIN had been entered the first time for each transaction. We concluded the fraudsters had somehow obtained Kitty’s PIN. Under the conditions of her eftpos card, the bank was not responsible for the fraudulent transactions made before the bank had been notified of her death in these circumstances.

We found the bank should have stopped access to Kitty’s account once notified of her death, and that it was therefore liable for all the transactions totalling $9,700 made after that date. We also found the bank could have communicated more clearly with the family. Our terms of reference did not allow us to look into the other aspects of the family’s complaint.


The bank made a confidential offer of settlement. All members of the family wanted to tell the full story of their mother’s loss and their experience of the bank’s response. The bank agreed to remove the confidentiality requirement and the family accepted the offer.

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