A woman whose husband left her, taking large sums of money with him, complained that her bank had not done more to prevent her from accepting a joint term deposit.
The woman’s marriage broke up in 2019, after her husband took a large sum of money from their joint account and overdrawn it.
When she went to a bank branch to explain what had happened, staff helped her pay off her mortgage and open an account in her name. But he didn’t ask for a $ 12,000 term deposit that was due in five days.
The money came from an insurance payment for earthquake repairs to their property.
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When the deposit expired, the wife’s husband took the money.
She complained that the bank should have known that this money would be disputed and should not have allowed her access.
The banking ombudsman investigated and said her description of her husband’s behavior should have been enough to make the bank understand that the funds in the joint account were subject to litigation.
“[She] had described how he left her, fled from the police, and “cleaned up” their joint accounts. Knowing this he should have said [her] it put a lock on the funds.
“We could not find any evidence that the bank ever discussed with [her] the possibility of taking such a step. The bank agreed to reimburse [her] the $ 12,000 for her to undertake earthquake repairs. In turn, [she] agreed to refund the money if she got it back as part of a relationship property settlement. She also agreed to provide the bank with proof of the repairs undertaken.
The ombudsman does not identify the complainants or the banks they complain about.
Banking ombudsman Nicola Sladden said people who are breaking up should speak to their lawyer and bank.
“Ask the bank for help if you need to protect the funds in your account.
“We advise people to immediately notify your bank if there is a dispute over funds – your bank may freeze accounts to protect the funds. In the event of a dispute, the bank must suspend the account in accordance with the terms and conditions of the account. A bank may suspend an account in the event of a dispute regarding the use of an account or the ownership of the funds therein.
“Banks need to listen carefully to customers after a relationship breakdown and respond with special attention. This includes looking for signs of financial abuse and responding appropriately. ”
Katrina Shanks, Chief Execution Officer of Financial Advice NZ, said the assets in the relationship would normally be divided evenly and the agreed-upon people would have to seek legal advice.
“A lawyer will advise you on the freezing of joint accounts, the separation of the assets held in the two names, the legal action if the assets are held in the name of your partner to prevent its sale before the final settlement of the assets and the day of your will.
“It is important that on the date of your separation, you are in control of your finances. If you’re both working, it’s time to set up your own bank account and put your pay into it. Change passwords and PINs on accounts, credit cards, and accounts with overdraft or loan facilities in your name that your partner may have had access to.
“Understand who is on which invoices and agree who is responsible for bill payments and automatic repayments and debt. The last thing you want is for this stuff to go unpaid and end up owing interest and getting bad credit.
Financial coach Hannah McQueen said people thought their partners “would play fair” when they split up, but that was often not the case. The system was not well configured to prevent people from using it as a weapon, she said.
“I always recommend creating a new bank account as soon as you separate, so that your salary can be paid into this account. Make sure this separate account is opened in a separate bank – so that it cannot be inadvertently added to your joint online bank accounts by human error or forgetfulness.
“I would suggest that you set up term deposits so that they can only be withdrawn with two signatories – but it’s usually something that needs to be done before things go wrong, and often for more.” convenience, you don’t think about doing it when times are good and you trust yourself.
“I advise people to immediately lower their pooled credit card limit. I’ve seen former partners spend on the joint credit card, which is the responsibility of both partners no matter who spends it – so remove that ability as soon as you can.