Kelsi subsequently made two payments of $100,000 and then received another call from the same person offering a 12-month investment in a Yorkshire Bank bond that was returning 13.5 per cent a year. In response, Kelsi transferred another $100,000. She was given online access to her money and only realised she had been scammed when she could no longer access it. She contacted her bank, but by then two months had elapsed and it was unable to recover any of her money. Kelsi asked the bank to reimburse her loss, but it refused.

Our investigation

We found there was nothing in Kelsi’s call that should have alerted the bank to the possibility she was being defrauded. Good banking practice requires banks to make inquiries about a transaction if they detect (or ought to detect) warning signs of a scam or fraud. In the absence of such warning signs, however, banks are not obliged to question any transaction, but rather must carry customers’ instructions.

The Financial Markets Authority had issued warnings at the time about the impersonation of BNP Paribas, but BNP Paribas remained a legitimate international bank offering investments, including bonds. Kelsi intended transferring her money to BNP Paribas via a New Zealand account, which was not an unusual or suspicious procedure. The processing of the transfers was done electronically and automatically, and this raised no suspicions in the bank’s fraud detection system.

Outcome

We did not uphold Kelsi’s complaint.