Bank Chose to Ignore a Fraud Warning. The Court Made It Pay

I have heard about scamming again recently. It has become so common and almost usual nowadays. What I want to share today is that if a bank had been negligent, and could have saved our hard earned money simply by taking a warning seriously, then this is something all of us should take note of.

A Court case examined exactly this situation. Money was transferred from an overseas account into local bank accounts linked to a scam. Once the fraud was discovered, the sending bank issued a warning notice asking the receiving banks to take action. One of the four banks involved chose to ignore the notice, and the remaining funds in the account were later withdrawn. The court found that this bank had been negligent, since it should have frozen the account and investigated once the warning was received. It was ordered to pay RM263,178.30 in damages.

The other three banks were not held liable, primarily because the money had already left the accounts before the warning arrived. This detail turned out to matter a great deal. The timing of when the bank was notified, and what it did after that, became the deciding factor in the case.

This case is a useful reminder for anyone who discovers they have been scammed. The bank receiving stolen funds should be informed as soon as possible, since the chances of recovering money drop quickly once it is withdrawn. Any delay in reporting reduces the window during which a bank can still act.

It is also worth keeping a clear record of when the bank was informed and how. This includes the date and time contact was made, the method used, whether by phone, email or in writing, and the names of any bank officers spoken to. If a dispute arises later over whether the bank acted quickly enough, or whether it was properly informed at all, these records become the evidence needed to support a claim.

As this case shows, courts look closely at what happened and when. A scam victim who can clearly show they reported the matter promptly, and that the bank failed to act, stands in a much stronger position than one who cannot prove what was communicated or when.

This timing factor, however, is not the only thing the court considered in reaching its decision. To understand the fuller picture, you may read the case of Nemonia Investments Ltd v AmBank Islamic Berhad & Ors.

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