The customer opened a Westpac bank account and added the complainant as a signatory. Four years later, in July 2019, the customer and complainant ordered $100,000 in cash. A few days later the customer was admitted to hospital.
The bank refused to deliver the cash to the complainant. In August 2019, the complainant made a bank transfer of $100,000 from the customer’s account to purchase gold bullion. Two days later, late on a Friday afternoon, the complainant attempted to withdraw $800,000. The bank blocked the account. The customer appointed the complainant as attorney. Despite this, the bank refused to allow the withdrawal. The bank advised its concerns that the funds were being used to purchase gold bullion in the name of the complainant, not the customer, and that the type of transaction was unlike any other transaction they had previously made. The complainant complained to the Australian Financial Complaints Authority (“AFCA”).
The bank’s terms and conditions provided that ‘on rare occasions we may … refuse to … allow further withdrawals due to unsatisfactory conduct or for any other reason we deem appropriate’. AFCA decided that the bank had not breached an obligation and had acted to protect the customer’s interests (Case 662814 concerning Westpac Banking Corporation).
It stated that ‘the bank does have a duty to exercise reasonable care and skill in carrying out transactions for its customers, particularly if the customer is vulnerable’ (emphasis in original). These include ‘those who may be experiencing age related or cognitive impairment and potential victims of elder abuse or financial abuse’. ‘The bank must be satisfied that the [power of attorney] was property taken and is being operated in line with the account holder’s best interests. I am satisfied that there is sufficient doubt for the bank to require the complainant to provide independent advice through a guardianship or financial management order provided by a Court or relevant state tribunal’.
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