Andrew Che lost his life savings after sending it to the wrong account. Barclays Bank has refunded his money after a prolonged battle for compensation. Video \ Jason Dorday
Barclays Bank claims Westpac made errors when Andrew Che Sit Bong’s $158,000 was misdirected.
Che’s money was lost due to a missing digit; Barclays later refunded him after a review.
Westpac denies liability, stating the error was Che’s and its processes were upheld by the Banking Ombudsman.
A major British bank claims Westpac made “critical errors” when an Auckland pensioner’s life savings were accidentally transferred to the wrong customer’s account.
Barclays Bank believes 78-year-old Andrew Che Sit Bong’s money would likely not have been lost had proper checks been conducted by the receiving bank.
However, Westpac isstanding by its processes and denies liability, saying the only error was that of the customer in keying in the wrong account details.
He said he was using an old computer with a “sticky keyboard”, and a “4″ failed to register as he keyed in payment instructions, leaving the account number with only 15 digits instead of the intended 16.
Westpac assumed the missing digit was from the suffix and added a zero.
The 16-digit number was for a valid account controlled by another customer who refused to return the money and is now under police investigation.
Che blamed the banks for not checking the name of the receiving account before completing the transfer and has been fighting for 16 months for compensation.
Andrew Che Sit Bong, who lost $158,000 in an online banking error, received a full refund from Barclays Bank following Herald coverage. Photo / Jason Dorday
The Herald sent detailed questions to Barclays about the case, including why it decided to refund Che.
A statement from Barclays said it correctly executed Che’s instructions and credited the nominated account.
However, “after thorough review of this case, it was determined we could have done more to help recover their funds sooner” by trying to recall the money from Westpac once it became clear the money had gone to the wrong account.
“We have therefore refunded all missing funds and made an offer of redress as a gesture of goodwill, which has been accepted.”
Despite refunding the money, Barclays did not accept fault for the initial “misallocation of funds”, which it believed was primarily due to Che’s actions and the “receiving bank’s error”.
Barclays confirmed it contacted Westpac to ascertain why the funds were paid when the name and account number didn’t match.
Westpac told Barclays “they don’t carry out these checks” for international payments.
Checking the names of recipient accounts was “standard practice” for British banks, Barclays claimed.
Andrew Che Sit Bong blamed the banks for not checking the account name matched that provided on the payment instructions. Photo / Jason Dorday
It believed that if Westpac had made the checks it would have “immediately shown a discrepancy” and prevented Che’s money being lost.
Barclays claimed another “critical error” was Westpac assuming the missing digit was from the suffix, though it would not comment directly on Westpac’s processes.
The Herald reported last week that Westpac chief executive Catherine McGrath personally intervened in the case last year by contacting Barclays about Che’s plight.
However, Barclays confirmed that McGrath’s outreach had “no bearing” on its decision-making on refunding Che’s money.
Westpac defends processes, denies making any error
In a statement, Westpac said it empathised with Che and was glad the matter had been resolved.
“We disagree with the assertion that Westpac made errors in the processing of his payment, and this view is supported by the Banking Ombudsman’s preliminary consideration of this case.”
While Britain and New Zealand had a confirmation of payee name matching service for domestic transactions, there was no such system for international payments.
In regards to the suffix, New Zealand banks accepted 15- and 16-digit account numbers, “so there was no explicit missing digit in the number Mr Che provided”.
“For a 15-digit account number, New Zealand banks add an extra zero to the suffix. This does not change the account the money goes into.”
As well as Che’s account error, a “key factor” in his loss was the seven-week delay in notifying Westpac that his funds were missing.
“We encourage any customers who haven’t received an expected payment to get in touch with their bank immediately.”
Westpac’s actions ‘reasonable’: banking expert
Massey University banking expert Claire Matthews believed it was “reasonable” for Westpac to assume the missing digit was a suffix number.
A missing account number would usually generate an error, she said.
“In this case, it is unfortunate both that the error resulted in a valid account number and that the recipient was dishonest.”
Matthews said the payment process was likely automated. While there were checks the banks could have done, they carried costs which had to be weighed against the overall benefits.
She added that customers needed to take care, particularly when making large payments.
“I have a lot of sympathy for the customer in this case, and the cost to him of this mistake. However, that doesn’t mean Westpac is at fault.”
Lane Nichols is Auckland desk editor and a senior journalist for the New Zealand Herald with more than 20 years’ experience in the industry.
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