Scam victims Borja Ares and Alfiya Laxmidhar and Carla O'Neil. Image / NZME
Scam victims Borja Ares and Alfiya Laxmidhar and Carla O'Neil. Image / NZME
Two investment scam victims due to receive nearly $300,000 in compensation from BNZ have been knocked back in their bid for a full refund of their lost money.
The pair complained to the Banking Ombudsman Nicola Sladden last year that BNZ had missed crucial “red flags” when processing their online payments. A decision in February this year agreed that BNZ failed to detect warning signs of a known scam and failed to act with reasonable skill and care, making it “substantially more culpable” than the victims.
However, Sladden also ruled Ares and O’Neil should shoulder some liability due to “contributory negligence” - or the extent that their own actions contributed to their loss.
They challenged the Banking Ombudsman ruling and sought a full refund from BNZ. They claimed it was wrong to find them partially liable for losing their money through fraud, which was tantamount to “victim blaming”.
Sladden’s finding confirmed “that BNZ should pay you compensation of $217,297″, which is only 70 per cent of what Ares lost.
“It is not ‘victim blaming’ to apportion liability between two parties who did not intend to cause the loss,” Sladden found.
“The fraudster was the principal cause of your loss. He or she intended to trick you into parting with your funds and, unfortunately, managed to do so. This person committed a crime.
“We do not agree with your assertion that we made our preliminary decision based on a ‘feeling that the loss should be shared between the bank and the victim’.”
The Ombudsman reiterated that although the bank did not commit a crime, it did fail to warn Ares about a potential “red flag” that emerged during his discussions with the bank.
“We have determined that the BNZ breached principles of good banking practice”, but “BNZ is not the fraudster”.
Ares said he couldn’t believe this was “the hill they have decided to die on” and intended to take further legal action.
Borja Ares and Alfiya Laxmidhar lost $330,000 in an elaborate Citibank-branded investment scheme. Photo / Michael Cunningham
He felt the entire process revolved around a “very unfair system of bankers that live in their little banking bubble”.
The Ombudsman’s decision stated “the principles of contributory negligence have been part of New Zealand law for many, many years, and their application has never been regarded as ‘victim blaming’, even if the original cause of the loss was a crime committed by someone other than the parties to the case”.
“In this context, it falls on us to consider how existing principles of contributory negligence would apply in apportioning the liability for your loss.”
The Ombudsman admitted BNZ was negligent in the bank’s dealing with Ares.
“Banks must warn a customer if they detect (or ought to have detected) warning signs of a real possibility that the customer is being scammed or defrauded. This is precisely what should have happened, but did not happen, in your case.”
Following the decision, Ares said felt he had no choice but to accept the 70 per cent offer, and received the money almost instantly after confirming his acceptance.
