Bank had no reason to investigate $400,000 payment to other “bank”

Common scams targeting bank customers,
In early 2023, Carson found a competitive term deposit rate on a website that compared rates among banks. He filled in his contact details on the website, and the following day a person presenting himself as an employee of the bank offering the competitive rate contacted Carson to discuss the deal. Carson then rang his bank to see whether it could match the rate and was told it could not. Carson spoke again to the person presenting himself as an employee of the bank, who explained that Carson would need to transfer his investment of $400,000 to a different bank for a brief “cooling-off” period before it was transferred to his new investment account.
June 2023

Carson rang his bank to make the $400,000 transfer. He filled out a “one-time, large- transfer” document, and supplied photo identification and a photo of himself holding that identification. When the bank received this documentation, it made the transfer.


Ten days later, Carson rang the second bank’s publicly available number to ask whether the individual he had been speaking to did, in fact, work at the bank. It told Carson he did not. Carson then contacted his original bank to say he had been a victim of fraud. His bank immediately took steps to attempt to recover the funds and was successful in recovering $200,000. It told Carson it was not responsible for the remaining $200,000 because Carson had authorised the transfer, and the bank had been given no reason to suspect the possibility Carson was being defrauded.

Our investigation

The bank’s primary obligation was to follow the instructions it received from Carson to make the payment of $400,000. The bank was not obliged to investigate the recipient of the transaction on Carson’s behalf. We also found the bank had no reason to suspect fraud or make enquiries about the payment.


We did not uphold Carson’s complaint.

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