In February 2025, the bank said it had not been able to fully grasp the nature of the activity on the accounts, and it also considered it lacked sufficient documentation to satisfy itself that it was meeting its obligations under the Act. It told her she had until 24 March to find another bank. The bank closed the transactional accounts on 28 April and the home loans on 27 May, and charged costs of $2,800 and $270 for the early repayment of her fixed rate loans. Kay complained that the bank had acted unfairly in closing her accounts and charging her costs. 

Our investigation 

We found the bank was simply following its legal obligations by inquiring into the source of Kay’s money and the activity on her accounts. We found the bank clearly and effectively communicated its requirements. Kay did not provide all the information the bank requested to meet its obligations. The terms and conditions of her loan allowed the bank to decline her request to refix it. We also found the bank gave reasonable notice before closing her accounts and suspending her internet banking. We are satisfied the initial 32 days’ notice was adequate time for Kay to set up transactional accounts at another bank. However, refinancing a loan is not as straightforward, and banks need to provide timeframes that are reasonable in the circumstances and for the customer. The bank acted reasonably, in our view, by allowing Kay’s loans to continue until she refinanced on 27 May. By failing to provide sufficient information about the sources of her money, Kay breached the terms and conditions of the accounts and loans. That breach meant she had to pay the costs associated with breaking her fixed-term loans.

Outcome 

We did not uphold Kay's complaint.