Two months later, the bank learned that the account to which Stella had sent the money had been used to receive funds as part of a term deposit scam. The bank immediately sent a request to recall all international money transfers sent from the account. The bank also emailed other banks where some of the funds had been received, but it was unable to recover any of Stella’s money.

Our investigation

A bank’s prime duty is to act on valid payment instructions from a customer. The customer, in turn, is responsible for ensuring the funds are going to the intended recipient and that the recipient is legitimate. Stella authorised the payments to an account at what she thought was a legitimate bank. The bank therefore fulfilled its duty to make the payment in accordance with her instructions. Banks in New Zealand are currently under no obligation to check that an account number and name match when processing a customer’s instruction, or to ensure the customer does indeed want the funds to go to the account number provided. There was nothing to suggest to the bank that the transactions were suspicious.

Outcome

We did not uphold Stella’s complaint.