Westpac Bank has refused to reimburse a pensioner after cyber criminals gained access to his internet banking and wired $100,000 in stolen money overseas.
Dunedin 71-year-old Ray Johnson believes the thieves likely hacked into his Westpac internet banking app. He says he has not received an explanation from Westpac and feels the bank should take responsibility for his loss.
Johnson discovered the money had been siphoned from his savings in three fraudulent transactions over two days in June, and immediately alerted Westpac and police.
Though Westpac was able to “stop” the two latter transactions of $11,000 and $38,000, the first withdrawal of $48,839 could not be recovered and the bank has refused liability.
Johnson, a retired wool grader who lives alone, said the lost money represents a third of his retirement savings which he had bequeathed to his grandnieces, meaning they would now miss out on their inheritance.
The loyal Westpac customer has banked with the company for decades and believes Westpac’s tough stance is cruel and unfair.
“It’s crap to be honest.”
Police say they investigated the fraud but established there were “no further lines of inquiry available” and advised Johnson to liaise with Westpac “to arrange for the amount to be refunded”.
“It is the responsibility of the bank to manage this, so further queries about their refunds process should be directed to them,” a police spokeswoman said.
Following Herald inquiries, Westpac - which made a $635 million cash profit in the six months to March - yesterday apologised to Johnson and says it is now reviewing the case.
Johnson said bank statements showed the fraudulent international transactions were converted into British pounds and Euros.
He received a letter from Westpac on September 16 saying it was pleased staff were able to recover $49,566 of the stolen money.
However, Westpac was still awaiting a response from the beneficiary bank regarding the remaining funds and if Westpac was unsuccessful in recovering the money it would not reimburse Johnson for the loss.
The letter said for a claim to be accepted there must be evidence that Westpac’s security systems had been breached, or a payment system fraud or failure had occurred.
“Our findings did not show any evidence to suggest the bank’s security relating to online banking has been breached. Nor is there a case of payment system fraud or failure that will qualify for reimbursement under Westpac’s general terms and conditions.
“I understand this may not be the response you had hoped for. I do hope this provides clarity to the matter.”
The letter advised Johnson to contact Westpac’s customer solutions team if he was not satisfied with the decision.
The rest of the letter gave general advice about protecting himself from scams, asking him to “remain vigilant”.
Johnson told the Herald he was adamant he had not shared his internet banking logon or password details with anyone.
He also did not believe he had divulged his personal banking information in response to phishing emails, phone calls or texts.
Johnson had met with a bank manager who told him the matter had been referred to Westpac’s fraud department and advised him to have his mobile phone “cleaned”.
“I said, ‘Do you not have insurance for these sorts of things?’ He said, ‘No we don’t. You’ll find very few banks have insurance for this sort of fraud’.”
Johnson said the lost money would have serious implications for him and his family.
“It’s a third of what I’ve got. I am retired so it hurts me. But I made a will, and everything goes to my grandnieces in Christchurch so it means that they miss out too.”
Westpac NZ general manager consumer banking and wealth Ian Hankins told the Herald the bank empathised with Johnson and was “prepared to look into this further”.
Investigations showed all three fraudulent payments were made from the device Johnson normally used for internet banking and from his usual IP address, and then approved using verification codes sent to his mobile phone.
“However, we have talked to Ray and we have agreed we will together look again at what happened.
“It’s clear our team hasn’t provided the level of support to Ray around this incident we would have liked. We have apologised to him for this and let him know we will be prioritising our further investigation to determine how the funds left his account.
“Our financial crime team managed to stop the second and third payments from reaching their destination. We have sought information about the status of the first payment from the receiving bank on three occasions but have not been successful.”
Johnson’s case follows that of a Southland pensioner who has labelled SBS Bank heartless for refusing to reimburse $134,000 that was stolen from the man’s online accounts, amid claims he failed to take adequate precautions.