Customer failed to give any exchange rate instructions

Breaking a term deposit,
Rosemary contacted the bank on 17 March 2020 and asked for its best Australia-New Zealand exchange rate. The two currencies were then nearly equal in value – a rarity. She had $3.4 million in term deposits that had not yet matured, and she was anxious to convert the money to Australian dollars while the exchange rate was so good.
March 2022

She contacted the bank again on 21 and 24 March seeking to lock in a rate through a foreign exchange contract. This would enable her to use the current favourable rate when her term deposits matured. The bank told her several times it did not offer such contracts to retail customers and asked for specific instructions about what she wanted done with the unmatured term deposits.

Rosemary would not accept that the bank did not offer foreign exchange contracts to retail customers such as herself and contacted the bank's markets team on 26 March to try to set up such a contract. The markets team said it would come back to her. In the meantime, another banker she contacted suggested she get a temporary overdraft of $3.4 million until the term deposits matured and convert that money to Australian dollars while the rate was good. However, Rosemary did not come back to the bank with any specific instructions about breaking the term deposits, seeking a temporary overdraft or sending funds to Australia. The New Zealand dollar weakened in value against the Australian dollar, and Rosemary claimed $130,000 in exchange rate losses.

Our investigation

We found Rosemary could not have taken advantage of the favourable exchange rate because she never gave the bank clear instructions and she never had funds available to exchange. The bank did not offer foreign exchange contracts and it was not under any obligation to suggest or offer a temporary overdraft. The bank did not fail to follow Rosemary’s instructions because she did not give it any instructions it could take action on. It was not responsible for any loss she might have suffered.


We did not uphold Rosemary’s complaint.

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