better banking

Early Xmas present for bank customer careless with phone banking PIN

07 Dec 2016

A bank customer who was careless with her phone banking PIN was lucky to get back $5,000 stolen from her account, says Banking Ombudsman Nicola Sladden.

“Banks are not usually obliged to refund stolen money to customers who have been careless and disclosed their PINs and passwords.  We recently investigated a case where the bank was also careless with its identity checks,” Ms Sladden said.

An acquaintance obtained the complainant’s phone banking PIN and was able to get account information from a bank officer, who recorded that the caller sounded unaccountably young, but took no further action.

The acquaintance called back, speaking to a different staff member, and explained that she had forgotten her internet banking password and needed to reset it. When she was unable to answer a security question the staff member asked her, she was told she could reset her password by using her phone number.

When she replied that it needed updating, the staff member did this for her. The acquaintance then changed the password, went into the account and withdrew $5,000.

“When the woman complained to the bank, she was told she had breached the terms and conditions of her account by disclosing her PIN. She wasn’t able to explain how the acquaintance knew her PIN number but we thought the bank should have been more attuned to the possibility of fraud.

“The bank’s failure to confirm the caller’s identity contributed to the theft. The first staff member didn’t act on his suspicions, and the second didn’t question the caller’s inability to answer a security question, or her wish to change phone number and internet banking password at the same time. 

“We put this to the bank and it agreed to reimburse its customer in full. It was a good result for the customer, but not one we usually see where the customer has disclosed their PIN or password,” Ms Sladden said.

Tips to protect yourself against loss in the event of fraud or card theft:

  • read the terms and conditions for all bank products you use
  • protect all bank PINs and passwords and have unique combinations for each

See our quick guides on Looking after your credit and debit cards and PINs and Common scams targeting bank customers for more tips on keeping your accounts safe.