Bank not obliged to give accuracy warning, but did anyway

Categories:
Mistaken payments
Summary:
A company, AB Ltd, bought an online payment system from a bank to help manage its accounts. It chose the product after the bank said it was more secure than ordinary internet banking. An employee at the company made an online payment, but incorrectly entered the seller's bank account number. The funds were transferred to Sam’s account, a customer at a different bank.

AB Ltd did not pick up the mistake until a month later, when it received a payment reminder from the seller. Its bank said it could not reverse the mistaken transaction because too much time had passed.  AB Ltd requested a return of the money, but Sam refused.

AB Ltd believed the bank had an obligation to warn it that the computer system wasn’t foolproof, and that special care was necessary when entering bank account numbers.

The bank said it was not responsible for the error and pointed to the system's terms and conditions for use, which said customers were responsible for any loss caused by errors when entering account information. The bank said AB Ltd had accepted these terms and conditions when it completed the application form. The bank offered a goodwill gesture of $500.

Our investigation

AB Ltd complained to us. We told it that customers were responsible for entering the correct information when making internet banking transfers. There was no need for a special warning because it should be clear to anyone entering such data that a problem would arise if the numbers were not accurate.

Outcome

AB Ltd accepted this view, and the bank’s $500 offer.

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