Rhett complained that the bank had not acted fairly or reasonably in the way it went about verifying the information he provided or in the way it closed the trust’s account. He wanted the bank to reinstate the trust’s account, provide an apology, give the trust compensation, and revise its verification policies.

Our investigation

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires banks to conduct a greater degree of due diligence for trusts than other customers. If a bank cannot carry out that due diligence or the information provided does not satisfy its requirements, it must close the customer’s accounts. The bank’s due diligence policy said it had to close a customer’s accounts if it could not conduct due diligence within 180 days.

The bank’s due diligence was extended over six months. We found the bank’s communication with Rhett was clear, and we found it made numerous attempts to get the information within the required deadline. However, we found the bank did not tell Rhett that it was placing the account on hold, and also that its final communications before closing the account were unclear. Nonetheless, we could not direct the bank to reopen the account. This was a decision for the bank to make after satisfying itself that the trust had met its anti-money laundering obligations.

We recommend the bank apologise for its unclear communication and pay Rhett $500 compensation for the impact of that inadequate communication.

Outcome

The bank provided an apology and made the compensation offer, but Rhett has yet to respond to the offer.