Bank’s identification deficiencies allowed fraudster to get replacement card

Categories:

Fraud & scams, Privacy/confidentiality, Bank accounts, Bank decisions,

Summary:

In November 2025, Joan’s wallet, which contained her driver licence and an expired debit card, was stolen. Two days later, someone went into a branch of the bank where she had the debit card account and got a replacement card. Over a three-day period, the individual made transactions totalling $37,125 from the business accounts of Joan’s company. The bank later reimbursed the money, along with associated fees and interest, although it maintained it had correctly followed its branch identification procedures when it issued the replacement card. Joan complained that the incident caused her significant stress and inconvenience. She also expressed concern about the effectiveness of the bank’s security processes. The bank offered her compensation of $1,000, but she rejected this offer and complained to us.

Published:

July 2026

Our investigation

The bank’s process required staff to verify a customer’s identity before issuing a replacement card or making changes to account details. We found the bank did not adequately follow its identification process, thereby enabling the individual to carry out the unauthorised transactions.

We also found the bank was too slow in returning the money. It took more than four weeks to reimburse Joan. She contacted the bank in November 2025 and did not get her money back until January 2026 – all the while suggesting to Joan that she was responsible for the transactions, despite possessing information that showed they were unauthorised. In addition, the bank failed to hold on to Joan’s driver licence when the same individual returned to a branch, despite a fraud note saying it should do so if the individual ever showed up at a branch.

The fraud occurred during a busy trading period for Joan’s company, and Joan was unable to access overdraft funds while the bank was investigating the matter. This caused her considerable stress and inconvenience. The bank apologised to Joan for its failings and increased its compensation offer to $9,000.