Bank gave adequate warning of crypto-scam risks

Categories:
Common scams targeting bank customers
Summary:
In April 2021, Malia used internet banking to make three international money transfers totalling about $340,000 in one day to a crypto-currency trader in the United States. The bank stopped the transfers and sent Malia a message telling him to call the bank. Malia called and confirmed he authorised the transfers and that they were going to a crypto-currency trader. The bank released the transfers. Some weeks later, he discovered he had been scammed.
Published:
July 2022

He called the bank, but it was unable to retrieve any of the money. Malia subsequently complained that the bank had not warned him sufficiently about crypto-scams. The bank did not accept this, and Malia asked us to investigate.

Our investigation

We listened to the recording of Malia's call to the bank. The bank began by explaining that it wanted to make sure he, and not a fraudster, was making the transfers. He confirmed it was him and explained that he was sending money to a crypto-currency trader. The bank asked if had chosen a genuine trader, warning that there were a lot of fake as well as genuine traders. Malia said he thought the one he had selected was genuine, adding that it appeared to be using a legitimate American bank. The bank confirmed it was a genuine bank, but said this did not necessarily mean the recipient at that bank was genuine. It warned Malia that the risk was his once money was sent. It reiterated that there were genuine and fake crypto-currency traders, and that customers should check carefully that they were dealing with a genuine trader. 

We told him the bank had provided an adequate warning and was not responsible for his loss.

In the meantime, he sent funds to another crypto-currency trader via another bank and reported back to us that the second bank had done a much better job of alerting him to the risks of crypto-scams. He said that had the first bank done as good a job as the second one, he would not have lost $340,000. We listened to the recording of his call to the second bank, but remained satisfied the first bank had given adequate warnings about the risks of crypto-scams.

Outcome

We did not uphold Malia's complaint.

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