A disabled woman had more than $10,000 stolen from her by an employee from a charity meant to be assisting her with her finances.
The caregiver used fraudulent transfer slips to move Aesha's money into a separate account before withdrawing the money from an ATM using Aesha's credit card. Photo: 123RF
The case was taken to the dispute resolution service, Financial Services Complaints Limited (FSCL), by the charity as it believed the credit union should have done more to stop the withdrawals.
The woman, named as Aesha, did her banking with a credit union, and received help from a local charity with her finances.
For Aesha's safety a process was set up requiring two signatures for withdrawals, Aesha's and a senior employee from the charity, with Aesha signing in front of the teller.
However the charity employee, who was also Aesha's caregiver, altered the withdrawal slips before going to the branch with Aesha. The caregiver also used fraudulent transfer slips to move Aesha's money into a separate account, which then allowed the caregiver to withdraw money from an ATM, using Aesha's EFTPOS card.
A teller noticed that a withdrawal slip had been altered, and the credit union contacted the charity.
The matter was referred to the police and an investigation was launched.
The charity also took a complaint to FSCL, as they believed that the credit union should have done more to prevent the fraudulent withdrawals.
It argued it was clear the withdrawal slips had been altered, that there should have been a $100 withdrawal limit on Aesha's account and the transfers to the ATM account were not authorised at all.
The credit union said it did not believe it was in any way liable, and that Aesha signing the withdrawal slip in front of the teller was sufficient and that the charity, or Aesha's family, should have picked up the large withdrawals on regular bank statements.
They argued that FSCL should not investigate because the caregiver may be ordered to reimburse Aesha as part of the police investigation.
In its decision FSCL said that by allowing one of the signatures on the withdrawal to be signed off-site, the credit union had contributed to the fraud being able to take place.
FSCL also said the credit union staff should have noticed that the withdrawal slip had obviously been altered, and that the number of ATM withdrawals had spiked. Previously Aesha had not used the ATM at all.
FSCL asked the credit union to reimburse 40 percent of the amount stolen and this was agreed to by both parties.
"Vulnerable consumers often require a higher level of assistance from the financial institutions they deal with because they can have greater needs, so extra effort and care on the part of financial institutions will often be necessary," FSCL's chief executive officer, Susan Taylor said.
She said fair conduct obligations on non-bank deposit takers are likely to increase in the near future, with the development of the Conduct of Financial Institutions legislative framework.
