The lawyers then learned the joint account holder was a friend of Agatha, who was also an executor of her estate and was to receive six of the 36 parts of the estate. They asked the friend to pass the joint account funds to the estate and to consent to the disclosure of information from the bank about the accounts. The friend refused to agree. The lawyers applied to the courts to have the friend removed as executor. Eventually the friend consented to the release of the information, and the lawyers discovered that the friend had been added as a joint account holder in 2015, and that the joint accounts held $115,000 on Agatha's death. The lawyers complained to the bank about adding the friend to Agatha's accounts and the lack of information given to the estate. Unhappy with the response, they came to us.

Our investigation

A bank has a duty to exercise reasonable care and skill when adding someone to a customer's account, especially if the customer is elderly or otherwise vulnerable. It should talk to the customer separately and in private about the reasons for the request, check the request is necessary to achieve the customer’s purpose, explain the full implications of the request, check whether a power of attorney or guardian has been appointed, verify that adding another person to the account will not be the detriment of the customer, and document the request.

We examined the information from the bank about the adding of the friend to Agatha's accounts, including the form signed by Agatha to give the friend the authority to operate her account. The form did not make clear that the friend would become owner of the various accounts. A diary note merely recorded that Agatha wanted the friend added as an account owner to her transactional account. 

At the time, Agatha was 97 and living in a retirement village where most of her living expenses were deducted automatically from her account. The bank had a branch at the retirement village, so Agatha had no need to travel to do any banking. She used a credit card for some expenses. The friend already had authority to operate Agatha’s accounts to help her manage her financial affairs, so there was no need for the friend to be added to Agatha’s accounts. Agatha’s will was made the year before, and made clear that her intention was that her estate be divided and shared amongst eight beneficiaries and there was no evidence her intentions for her estate had changed since then.

We concluded the bank had not discharged its duty to exercise reasonable care and skill when adding the friend to Agatha's accounts. We were not satisfied the bank had ensured Agatha was making the request of her own free will, or that the full implications had been made clear to her. We were not satisfied it was ever Agatha's intention that the funds held in her accounts become solely owned by the friend on her death.

Outcome

We recommended the bank put the estate in the position it would have been in had the accounts remained sole accounts on Agatha's death, and also that it pay the estate interest on those funds and reimburse it for the costs incurred.