She complained that the bank failed to identify and prevent the scam payments. She also complained that its investigation of her case was mishandled, incomplete and contained factual errors, and that its communication was poor.

Our investigation

We learned that on three occasions the bank’s concerns about Marilyn’s payments prompted it to contact her and each time Marilyn confirmed she had authorised the payments and that they were for legitimate investments. On one occasion, the bank warned her about investment scam risks and said recovery would be unlikely if the payments were part of a scam.

We found the bank had taken reasonable steps to inquire into the questionable transactions and warn Marilyn about scam risks. Banks are not liable for authorised payments unless they detect, or should have detected, warning signs of a possible scam and fail to act on those warning signs. The bank had concerns about the payments and warned Marilyn. It was not therefore liable for Marilyn’s loss.

When Marilyn reported the scam, the bank told her it would send a follow-up email so she could provide a police report and further information. It did not send the email. Marilyn got back to the bank but was still unable to supply the information requested by the bank before it completed its initial investigation.

We found the bank did not communicate clearly or follow through as promised. We also found its complaint response contained factual inaccuracies and did not clearly explain earlier fraud-related activity on Marilyn’s card. These failures caused needless stress and inconvenience. We recommended the bank pay Marilyn $750 for stress and inconvenience, which it did.

Outcome

Marilyn accepted the bank’s offer.