Customer entitled to keep making withdrawals despite warning to bank about dementia

Categories:

Vulnerable customers and hardship decisions, Instructions not followed, Investment,

Summary:

Marguerite had substantial investments with the bank and was in regular contact with staff at its private wealth team. She was a frequent branch visitor and regularly withdrew large sums of cash. During 2019, Marguerite withdrew over $140,000 in 34 teller-assisted withdrawals. In February 2020, her daughter Abby alerted the bank to the fact her mother had dementia, and it loaded a warning on her file saying she was a vulnerable customer and that staff should take care with any large or unusual transactions.

Published:

July 2025

Marguerite continued to make cash withdrawals after this warning was added. In March, she made one withdrawal of $5,000 and two withdrawals of $10,000. On 6 July 2020, she withdrew $23,000. On 21 July, Marguerite’s enduring power of attorney was invoked. Marguerite died a week later, aged 89.

Abby, as one of the executors of Marguerite’s estate, complained that the bank allowed her mother to make large cash withdrawals both before and after it had placed the warning on her file. She said her mother’s mental and physical health was sufficiently diminished that the bank should have noticed and questioned her withdrawals. She also complained that the bank had shared information with the estate’s former solicitor when she had instructed it not to, and that it failed to respond to her request for information in a timely way.

Our investigation

We could find no evidence of anything that should have aroused the bank’s suspicions before Abby’s call to the bank in February 2020. The money Marguerite withdrew belonged to her, and she was entitled to spend it as she saw fit. The fact a warning had been placed on Marguerite’s file did not mean the bank could refuse to act on her instructions. Quite the contrary: she could continue to manage her banking affairs without impediment unless a medical professional certified otherwise. The bank explained this fact to Abby at the time.

Marguerite had a well-established history of making cash withdrawals, often large ones, so these withdrawals were not in themselves suspicious or unusual. In the case of the two $10,000 cash withdrawals, branch staff said Marguerite explained that she wanted to be sure of having money during the COVID-19 lockdown. As for the $23,000 withdrawal, Abby accompanied Marguerite during this visit. The bank recorded that $20,000 was to cover a period of ill health during which Marguerite thought she would not be able to get back to a branch, and the remaining $3,000 was for family birthdays (also a regular pattern for Marguerite). Staff noticed that Marguerite’s health had declined significantly. This withdrawal, although bigger than usual, raised no concerns because Marguerite had given a credible explanation for it. Staff were also reassured by Abby’s presence.

We could find no evidence that Marguerite was being unduly influenced, and her medical records didn’t indicate a lack of mental capacity during this period. Marguerite continued to liaise with the private wealth team about her investments, as well as to transfer money to her family. We were satisfied the bank had acted with reasonable skill and care when providing banking services to Marguerite.

We found the bank should not have shared information with the estate’s former solicitor, contrary to Abby’s instructions, but it had apologised to her and provided training to staff about following executor’s instructions, which we considered a satisfactory resolution of the matter. The bank had also failed to provide some statements that Abby had requested in a timely way, but the request was made three years after Marguerite’s death and the delay had no effect on the estate.