Jody asked the bank to reimburse her loss of $15,610, saying it had not met its scam protection commitments under the Code of Banking Practice. The bank refused her request. She also said the bank should have identified the payments as suspicious and not processed them.

Our investigation

The bank's records showed Jody used a third-party payment service when making the three payments to the cryptocurrency exchange. Jody said she authenticated the payments through the bank's mobile banking app and considered them to be payments made through the bank's own systems. We found the payments were made using a separate service that facilitated the transfer of funds. The way the payments appeared on her bank statements did not change this fact. Jody’s use of a third-party payment service made her ineligible for compensation under the Code of Banking Practice.

As for whether the bank should have detected that Jody’s payments were possibly part of a scam, the bank’s records showed Jody authorised the payments using her usual device and banking credentials. She did not contact the bank before making the payments. The bank's fraud monitoring systems did not identify the transactions as suspicious. We did not find the bank was on notice of any warning signs to suggest Jody was possibly the victim of a scam.

The bank contacted the cryptocurrency exchange within 15 minutes of Jody reporting the scam, but the exchange said the transactions had been completed and the cryptocurrency had already been delivered, so the transactions could not be stopped.

Outcome

We did not uphold Jody’s complaint.