Bank not obliged to check account number and name matched

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Bank not obliged to check account number and name matched

Categories:

Fraud & scams,

Summary:

Martin sent $US90,000 to a fraudster’s account as part of an invoice scam: the fraudster contacted Martin, pretending to be a colleague in the US, and advised that an upcoming payment needed to be made to his new account. Martin did not discover the deception until two weeks later. He contacted the bank, and it tried to retrieve the money but without success. Martin complained to the bank that it should have alerted him to the fact that the name and number of the account to which he sent the money did not match. The bank said it had no obligation to check this, and he asked us to investigate.

Published:

October 2021

Our investigation

At the time of the payment (2021), banks were obliged to ensure that they sent funds to the account number specified by the customer. They did not have any obligation to ensure that number matched the name of the person the customer believed they were paying. Martin's bank had made the payment to the account number he had specified. After being told about the scam, it acted promptly, within 24 hours, to try to retrieve the money.