Bank acted reasonably in freezing accounts during dispute

Freezing an account,
Rochelle, along with her sister and brother, had enduring power of attorney over their mother's finances. Rochelle’s brother contacted the bank in May 2022 to say he was concerned Rochelle and her sister might remove a large sum of money from their mother's accounts without his agreement. The bank froze the accounts and told the trio it was doing this because there was an apparent dispute among them, and it would unfreeze the accounts once all three wrote to it confirming how the account was to operate. It said it could also unfreeze the accounts if their mother gave it written instructions, and a medical professional confirmed she could understand and manage her financial affairs.
July 2023

Rochelle provided the bank with instructions from her mother, although the medical professional’s confirmation did not fulfil requirements under New Zealand law. The bank also learned there were questions about the circumstances under which the mother signed the instructions to unfreeze the accounts. It therefore asked the mother’s lawyer to arrange to provide the instructions, and also to confirm the mother was giving instructions of her own free will.

Rochelle complained to us that the bank had undermined the enduring power of attorney authority, which allowed the three siblings to make decisions by majority, based on the unfounded accusations of one of the siblings. Furthermore, Rochelle considered the bank had unfairly and constantly changed what was required to unfreeze the accounts.

Our investigation

Under the terms and conditions of the mother’s accounts, the bank was entitled to freeze the accounts if it reasonably believed there was a dispute about how they were used or who owned the money in them. The bank did not need to make any further inquiries or obtain any evidence to act on this belief. The bank formed the reasonable belief that a dispute existed when one of the siblings expressed concern that a large amount of money might be transferred out of the mother's accounts as a result of a disagreement between the siblings.

The enduring power of attorney document set out how the siblings would decide what instructions to give the bank, but the bank was not a party to the document. Its relationship with Rochelle’s mother was governed by the terms and conditions of her accounts, which empowered the bank to freeze the accounts in the event of a dispute. We also considered the bank had acted reasonably in what it required of the siblings and their mother to unfreeze the accounts.


We did not uphold Rochelle’s complaint.

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