Customer’s failure to notice obvious warning signs ruled out right to reimbursement

Common scams targeting bank customers,
Cameron received a text apparently from Waka Kotahi NZ Transport Agency telling him his car registration was due for renewal. Cameron clicked on a link in the text, which took him to what appeared to be the organisation’s website. He entered his credit card details, thinking he was paying for his car registration, and then received three texts on his mobile phone with authentication codes. Cameron entered these into the website.
September 2023

The website was a fake, and the three transactions totalled $5,720. The bank offered to reimburse Cameron half of his loss as a gesture of goodwill. Cameron said he was the victim of the scam, and the bank should reimburse him the full amount. 

Our investigation

The Code of Banking Practice requires banks to reimburse fraud losses if a customer was not dishonest or negligent, complied with the bank’s terms and conditions, and took reasonable steps to protect his or her banking. Cameron had not authorised the transactions, and he maintained he took reasonable care with his credentials: the fake website was very convincing and he genuinely believed he was entering his card details into the NZ Transport Agency website. However, the texts containing the authentication codes that were sent to his mobile phone said the payments would go to a merchant other than the Waka Kotahi NZ Transport Agency, the transaction amounts were not New Zealand dollars, and they were for amounts vastly higher than necessary to renew a car registration. By failing to read the information accompanying the codes, which would have alerted Cameron to the impending scam, he did not, in our view, take reasonable steps to protect his banking, and the bank was therefore not liable for his loss.


Cameron accepted the bank's offer to reimburse half of his loss.

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