Filipe called his bank to increase his internet banking limit so he could transfer $100,000 in two payments. He told the bank he was buying Australian bank bonds. The bank agreed to lift the limit. On each occasion when he transferred money, he entered the name of the Australian bank in in the reference field.

A few months later, the police contacted Filipe to say he had been caught up in an investment scam. Filipe asked his bank to recall the funds, but it had no success. Filipe complained that the bank should have known it was an investment scam because he told it he was buying bonds with an Australian bank. He also said the Financial Markets Authority had issued a warning at the time about scammers impersonating the international bank he thought he had been using as a conduit for the transfer of the money to the Australian bank. Furthermore, he argued, his bank should have checked that the name of the bank he had entered as the recipient of the funds matched the account number he had entered. Had it done so, he said, the scam would have been uncovered.

Our investigation

We looked into whether the scam raised any red flags that the bank should have noticed and concluded there were none. Filipe never mentioned the name of international bank that was the subject of the warning by the Financial Markets Authority, either in his call to the bank or in any of the payment reference details. He had mentioned only the Australian bank, which was a legitimate financial institution. As for checking that the recipient’s name matched account number, banks are under no obligation to take this step, and the terms and conditions of Filipe’s account made clear that it did not carry out this check.

Outcome

We did not uphold Filipe’s complaint.