Tuesday, 7 September 2010

Customer bites back at bank

It's not often a bank comes out on the wrong side of an argument concerning the status of an account, but Westpac did just that according to Banking Day this month:
"The High Court has ruled that a bank could not claim qualified privilege against a defamation claim when it sent dishonoured cheques back to payees, based on a clerical error.
In December 1997 Westpac dishonoured 30 cheques drawn by Homewise Realty, a real estate agency run by Paul Aktas. The cheques were returned to the payees or collecting banks marked "refer to drawer".
The term "refer to drawer" is widely understood to mean that there were insufficient funds to meet the cheque. According to the court record, some members of the Turkish community in the Sydney suburb of Auburn, where Aktas ran his business, "reacted adversely and with some hostility to Mr Aktas after it became known that trust account cheques had bounced."
Westpac made a mistake in dishonouring the cheques...."

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