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Card fraud – unauthorised withdrawals over extended period of time – family member suspected – care of card and PIN
Mrs L complained to her bank that an unknown person had made several unauthorised ATM and Eftpos withdrawals from her account. More than $3,500 had been fraudulently withdrawn over a six week period. Mrs L said that she had never disclosed her PIN to anybody, and that her card had been in her bag at all times. She said that she could not know when funds first began to be taken from her account, as she had not received any bank statements.
The bank and the police investigated the complaint, and obtained video surveillance footage of one of the unauthorised transactions. It showed a youth resembling Mrs L’s son withdrawing money from an ATM. Although the police concluded that Mrs L’s card had been used by a family member, there was no evidence of this apart from the surveillance tape, which was not of good enough quality to make a positive identification.
The bank declined to reimburse Mrs L for the full amount she claimed to have lost. The reasons for declining were: (a) the disputed transactions were interspersed with her legitimate transactions; (b) some of the disputed transactions had been immediately preceded by balance enquiries; (c) all the transactions had been completed on the first use of the PIN; (d) Mrs L did not report her card as lost or stolen, and advised the bank that it had never left her possession; and (e) the bank had not received any reports about “card skimming” at any of its ATMs in Mrs L’s area. Nonetheless, the bank offered Mrs L a goodwill payment of $1,000, which she declined. The matter was referred to my office.
It was very difficult to determine how the offender came to know Mrs L’s PIN. An offender usually obtains a PIN by observing the cardholder keying in the number, by being told the number, or by finding a written record of it. Mrs L said that her PIN neither related to any personal information nor was written down. However, I was a little surprised to find that, when Mrs L was questioned after the unauthorised transactions had occurred, she could not recall her PIN. This suggested to me that she may have had difficulty in remembering her PIN and raised the possibility that she may have needed to write it down.
Regarding the care of her card, Mrs L said that she always kept it in her bag. She had not been aware of her card being missing at any time. Although it appeared that it had been taken from her bag several times, I found no evidence to suggest that she had failed to take reasonable care to safeguard it.
This was an unusual case, as the withdrawals occurred over an extended period of time. In nearly all cases that I investigate involving the unauthorised use of a card and PIN, the card is stolen, and the thief then immediately uses it to withdraw funds from the account.
From the information available it was clear that Mrs L did not make the disputed withdrawals herself. As the offender had ready access to Mrs L’s card, removing it from her bag without her knowledge on several occasions, it would seem almost certain that the offender or an accomplice was known to Mrs L, and could have been a member of her family. A family member would have been in a position to intercept account statements.
I could not determine how the offender found out Mrs L’s PIN, although it seemed most likely that she had either been observed using her PIN or had noted it down in writing.
In the unique circumstances of the case, it seemed that the fairest solution was for the bank and Mrs L to share equal responsibility for Mrs L’s loss. I therefore suggested that the bank should reimburse Mrs L $1,750 for half of her loss. Mrs L and the bank accepted my findings.