Terms and conditions allowed bank to suspend trust account until suspicions allayed

Categories:

Bank accounts, Closing/Freezing accounts,

Summary:

Leslie had a trust account at the bank. The beneficiary of the trust was a minor in her care. Leslie complained that the bank suspended the trust account without warning and said she had to supply detailed records about transactions to show they were made for the beneficiary of the trust. She said she was not told when opening the account that she might need to provide such information and found the bank’s request stressful and unreasonable.

Published:

December 2025

Our investigation

We reviewed the bank’s terms and conditions, which allowed it to suspend an account if it reasonably suspected that doing so was necessary to protect the interests of another party, such as a trust beneficiary. The terms and conditions also said that any suspension would remain until the bank was reasonably satisfied the reasons for the suspension no longer applied.

We considered the bank’s concerns about the transactions and its review of the account statements. The bank said it suspected there were transactions for gambling that did not align with the trust deed and asked Leslie to provide copies of the trust’s books or accounts showing that payments from the account were made in accordance with the trust deed. We considered this was a reasonable request in the circumstances and consistent with the bank's terms and conditions, noting that the trust deed required Leslie to keep such records.

We explained to Leslie that the suspension could not be lifted until the bank was satisfied that the reasons no longer applied.