The following month, while the bank was still investigating, Bradley received a second payment of $1,135, which the sending bank flagged as potentially fraudulent. Bradley’s bank froze his accounts, gave him notice that it would close them, and ultimately returned the second payment to the sending bank.

Bradley maintained that all the money paid into his account was legitimate. He said the bank’s mention of fraud in the notice of account closure was hindering his ability to open accounts elsewhere. He also said the bank had shared the outcome of its fraud investigation with other banks, making it more difficult for him to open new accounts. He sought the bank's help to open new accounts and compensation for the impact on his life while he remained without a bank account.

Our investigation

The bank's terms and conditions allowed it to suspend or close accounts if it reasonably suspected they were being used to facilitate fraud or other criminal activity. They also allowed it to reverse payments in such circumstances.

The bank had contacted Bradley and sought an explanation for the $12,500 payment. It also considered information from the sending bank and its customer – information that was inconsistent with the explanation he had given. The bank of the customer that sent the second payment notified Bradley’s bank of its fraud concerns and asked it to restrict Bradley’s access to the money while it spoke to its customer. Bradley later told his bank he could not contact the person who had sent him the money only days earlier. The bank eventually returned the payment after closing Bradley’s accounts.

We found that the bank followed a fair process when deciding to close his accounts. It identified suspicious activity, gave Bradley an opportunity to explain it and considered all available information before giving him 14 days’ notice of its intention to close his accounts. We were satisfied that the bank had a reasonable basis for its suspicion that fraud might be taking place.

We found no evidence that the bank had reported Bradley through the fraud data exchange or otherwise shared the outcome of its investigation with other banks. Bradley believed this was the only possible explanation for the difficulty he was having in opening accounts elsewhere - however, other banks had previously reported him as on the fraud data exchange as a complicit and witting money mule. Those reports pre-dated the $12,500 payment and could explain the difficulties he was experiencing.

Outcome

We did not uphold Bradley’s complaint.