The Banking Ombudsman has begun making inquiries into Westpac Bank after receiving a complaint about the company’s refusal to refund a pensioner’s stolen $49,000.
Dunedin man Ray Johnson says he wants an apology from Westpac and compensation for stress and anxiety after the Australian-owned company initially refused to reimburse him when thieves siphoned $100,000 from his accounts in three separate transactions in June.
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 refused liability.
It was only after intervention from the Herald that Westpac backed down and agreed to reimburse the retired wool grader in a one-off “goodwill payment”.
Johnson believes the thieves likely hacked his Westpac internet banking app before wiring the money offshore.
A banking expert believes Westpac likely breached the Code of Banking Practice and says Johnson could have a claim for damages.
A Westpac spokesman said: “We acknowledge we took time to look into this issue and we have apologised to Ray for the lapses in service. We will constructively follow the Banking Ombudsman Scheme process on any further resolution as we do with all complaints.”
The 71-year-old Johnson complained to the Banking Ombudsman last week and provided a statement about his case on Friday.
“Until you got involved, as far as [Westpac] were concerned it was over and done with,” Johnson told the Herald.
“The amount of stress I’ve been through, I wouldn’t mind a little bit of compensation and an apology from the bank.”
In his statement to a Banking Ombudsman investigator, Johnson said: “Sometimes I just couldn’t get out of bed. Other times I had trouble sleeping during the night. She said, ‘We’ll take that into consideration’.
“She said, ‘How did it affect you’. I said, ‘It was my mother’s and father’s money that I had inherited after mum died. It was money from when they sold the house and that money mum and dad had worked hard for, and I felt I had let them down.”
Since the Herald reported on Johnson’s case, he said he’d been approached by strangers about his standoff with Westpac, which reported a $1.1 billion profit last month.
At a bowls tournament last week, a fellow competitor told Johnson: “You beat the f***en bank.”
“One guy said, ‘I can’t remember your name but were you the guy in the paper?’ He said, ‘Well done. They’re getting away with too much’. Everyone came up and congratulated me.”
Johnson said the stolen money had now been refunded into his account. He planned to donate $500 to the Otago Community Hospice and another $500 to the Stroke Foundation.
Both organisations had special significance to Johnson. He lost his father to cancer of the oesophagus in 1988, his mother to a stroke four years ago, and his sister to a brain tumour six months before his mother’s death.
The local hospice was a worthy recipient of the money, Johnson said.
“They’re always fundraising and they’re on the bones of their arse. Mum used to work down there and they do a great job. I thought they can do with the money.”
Hospice CEO Ginny Green said Johnson’s gesture was “very sweet”.
“We love it when people think of us in these circumstances. We have to raise $3 million this year just to carry on so every little bit helps.”
A Banking Ombudsman spokeswoman confirmed it had touched base with Johnson but declined to comment further.
Westpac says an investigation into the theft was “inconclusive”, though there was no evidence the bank’s online security systems had been breached.
“Recognising the specific circumstances of this case, that further investigation would take more time, and our desire to provide Ray with certainty, we have decided to make a goodwill payment covering the full amount of the lost funds.”
Massey University banking expert Associate Professor Claire Matthews felt Westpac’s initial refusal to reimburse Johnson had likely breached the Code of Banking Practice, which requires banks to reimburse customers unless they have been wilfully negligent, opening the door to a potential compensation claim.