Transactions gave no hint that customer was being scammed

Categories:

Fraud & scams, Closing/Freezing accounts, Investment,

Summary:

In September 2025, a scammer persuaded Vaughn to buy cryptocurrency and transfer it to a digital wallet outside his control. Vaughn made two debit card transactions to a cryptocurrency platform. The bank’s fraud detection system identified the activity, blocked his debit card, and contacted him. Before the bank spoke to Vaughn, he made five internet banking payments totalling $16,800 to other bank accounts. He later realised he had been scammed and reported the matter to the police and the bank.

Published:

November 2026

The bank recovered $6,400 but declined to reimburse the remaining loss. Vaughn said the bank should have identified the later payments as suspicious, warned him about the scam, or intervened before the payments were processed.

Our investigation

The bank’s records showed it blocked Vaughn’s card, contacted him and kept the card blocked until the bank spoke to him. This prevented any further card transactions.

As for the internet banking payments the following day, these were made using Vaughn’s usual device and banking credentials, and the money went into New Zealand bank accounts. The transactions did not involve a cryptocurrency provider. In such circumstances, the bank was not aware of the possibility the payments were part of a scam.

The bank acted promptly once told of the scam and referred the matter to its fraud team. It also stopped activity on the recipient account that happened to be with the bank, contacted the other bank involved, and tried to retrieve the card transaction amounts. We found the bank took reasonable steps to try to recover Vaughn’s money. Those efforts resulted in the recovery of $6,400.