A recent determination by the Australian Financial Complaints Authority (AFCA) found that the HSBC Bank Australia Limited was liable for the disputed transaction which was unauthorised because the scammer made it without the complainant’s knowledge or consent.

Liability was decided in accordance with the ePayments Code which makes the customer liable for the disputed transaction if they voluntarily disclose the passcodes to the scammer.

AFCA determined that the customer did not voluntarily disclose the passcodes to the scammer as it was satisfied the scammer’s manipulative tactics resulted in a degree of coercion that impacted the customer’s free will and choice, so the customer felt compelled to disclose the passcodes.

AFCA was satisfied the scammer created a sense the complainant needed to act urgently to prevent the loss of his funds, and the overall impression he was dealing with the bank, and it would therefore not be fair in all the circumstances to find the disclosure of the passcodes was voluntary.

The customer was entitled to compensation for the disputed transaction, lost interest that would have been applied to the home loan, non-financial loss and a contribution to the legal costs he has incurred.

AFCA determined that the bank must pay the customer:

• $47,028.45 (being the disputed transaction less $150 limited liability of the customer);
• the amount of the interest offset that would have been applied to the home loan linked to the account, if the disputed transaction had not been made, calculated from 13 June 2023 until the date payment is made;
• $1,000 non-financial loss compensation for the bank’s failure to meet the standards in the Banking Code following the complainant’s notification of the disputed transaction; and
• $5,000, being a contribution to the complainant’s legal costs.

Background.

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Author: David Jacobson
Principal, Bright Corporate Law
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About David Jacobson
The information contained in this article is not legal advice. It is not to be relied upon as a full statement of the law. You should seek professional advice for your specific needs and circumstances before acting or relying on any of the content.