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Case - 48534

2016 - 2017

Bank accounts

Transactional account

Mr and Mrs J had joint accounts with an “either to sign” operating authority and a home loan with their bank. Mrs J was also an employee of a subsidiary group of their bank. The couple’s relationship ended and Mr J asked the bank to set up internet banking access so he could view transactional information. After a short delay, the bank provided the information. When he received it, Mr J discovered Mrs J had transferred funds from the account half an hour before he got the information. The account was frozen a few days later when the bank realised there may be a relationship dispute between Mr and Mrs J.

Mr J was suspicious of the transaction’s timing and complained to the bank. The bank explained it had been unable to identify him when he requested the information, so it had sought Mrs J’s permission to release it. Mr J was unhappy with the bank’s explanation and asked us to investigate.

Our investigation showed that the bank hadn’t tried to identify Mr J, nor had it advised him that it would contact Mrs J. Further, when the bank did contact Mrs J it appeared it was put on notice of the relationship dispute then but allowed her to make the transaction anyway. The next day, the bank asked Mrs J whether it should freeze the account and she said no, but it didn’t ask Mr J if he wanted it frozen.

When a bank is on notice of a dispute over funds ownership or how an account operates, it should consider whether to freeze the account. It should also treat both parties equally during this process. We considered the bank hadn’t responded appropriately to Mr J’s information request and it had inappropriately contacted Mrs J without his knowledge. Further, the bank hadn’t treated Mr J fairly when it was on notice of a dispute between him and Mrs J.

We explained our views to both the bank and Mr J. The bank then agreed to write Mr J a letter of apology.  It also offered him $1,000 inconvenience compensation. As the amount Mrs J transferred would be considered in their impending relationship separation agreement, it didn’t seem Mr J had suffered a direct loss. Although the bank had acted wrongly, the inconvenience was short-lived (five days from when he asked for information and when the account was frozen) so the compensation amount offered was reasonable. Mr J accepted the bank’s apology and its offer and the case was closed.

See also our Quick Guide to Joint accounts and relationship breakdowns and Quick Guide to Account Mandates.