Man’s account closed after son used it to receive proceeds from scams
Wednesday, 22 July 2026
An unnamed bank has paid a man $500 in compensation for reporting him as a “complicit money mule” to the Fraud Information Exchange, when he had actually been a victim of his son’s dishonesty.
The Fraud Information Exchange (FIX) was set up late last year for banks to share information on accounts being used to launder money from scams.
But banks are still learning how to report customers who they identify as having received money from scams and fraud, and when it is reasonable for them to freeze, and close accounts.
On Monday, The Post reported on an unwitting money mule being paid $1500 in compensation after a bank reported him to FIX as a complicit money mule, when he was actually a naive recipient of stolen money who believed he was doing “legitimate” work.
Now, Banking Ombudsman Nicola Sladden has published a second case note from a complaint from another bank customer.
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It involved a man who received a sum of $300 into his account, which he spent through cash withdrawal, supermarket shopping and online services.
Another bank told the man’s bank, which is not named by the ombudsman, that the money came from a scam.
It appears the scam was conducted by the man’s son, who owed him money, and had access to the account.
His son had told his father to expect repayment from someone who was buying an item from him.
The ombudsman said the man questioned his son after a second payment arrived, and then blocked his son’s access to the account, though his son told him the payments were legitimate.
The man explained to his bank what had happened, but the bank told him the next day that it would be closing his accounts, and reported him to FIX.
The man complained to the Banking Ombudsman that his bank had not given him enough time to provide evidence of his innocence.
The bank’s communication with him had been unduly harsh and accusatory, and it had wrongly logged him as a complicit money mule on FIX.
The ombudsman found the bank had a right to freeze accounts it reasonably believed has been used to facilitate fraud. It also had a right to close his account, after giving notice, which it did.
However, the bank lacked any firm evidence that Howard was complicit in the scam, and the ombudsman found the bank’s report did not fairly and accurately reflect the circumstances of the case.
“What’s more, the bank had also told Howard he was complicit in the scam, had knowingly profited from it and was at risk of re-offending,” the ombudsman ruled. “Those statements, too, did not fairly reflect the evidence the bank held. We found the bank did not communicate with [the man] fairly and effectively.
The ombudsman recommended the bank amend its fraud reporting on the fraud data exchange, apologise to the man, and pay him $500 compensation.
FIX is run by private company Get Verified, which is owned by the largest 10 retail banks. It was launched after pressure from scam victims and politicians for banks to do better to protect New Zealanders from fraud and scams.
Duncan Robertson, chief executive of Get Verified, said that since going live in early September, data on 40,000 suspicious (money laundering and fraud) transactions had been shared through FIX.
That had enabled banks to freeze accounts before money could be transferred into overseas accounts, or cryptocurrencies, which had resulted in around $1 million of victims’ money being saved each month.