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• Westpac was cleared of fault after helping an 89-year-old withdraw more than $300,000 in cash. 
• The Banking Ombudsman found no evidence the woman was unduly influenced or lacked capacity. 
• Westpac apologised for sharing information posthumously with a former lawyer but backed its staff for processing the woman’s large withdrawals. 

Westpac has been cleared of fault after bank tellers helped a widowed 89-year-old withdraw more than $300,000 in cash in the 34 months before she died. 

The Banking Ombudsman launched an investigation after the woman’s daughter complained about Westpac’s handling of the case last year. 

She told the Herald that after her mother passed away, she was stunned to learn the family matriarch had made 70-plus teller-assisted cash withdrawals at a Wairarapa Westpac branch totalling $305,000 between September 2017 and July 2020. 

It’s alleged that, in one instance, staff stuffed $23,000 into an envelope – estimated to be 8cm thick – then handed it to the pensioner, despite her not having a handbag. 

The wealthy widow was diagnosed with onset dementia shortly before her July 2020 death. 

And while she had millions of dollars in various term deposits, her family claims she lived frugally and most of the cash withdrawals remain unaccounted for. 

The daughter asked the watchdog to investigate whether bank staff had shown reasonable care and skill in regularly dolling out large wads of cash to the octogenarian given her “diminished” physical health, and if the Australian-owned company should pay compensation. 

However, in a decision this month, Banking Ombudsman Nicola Sladden cleared Westpac of wrongdoing and found it was not at fault. 

The decision says the pensioner was a long-standing Westpac customer. Although she had “substantial investments” with the bank, she was not confident with technology and “preferred to transact in cash”. 

The woman frequently visited the branch and regularly withdrew large sums of money. Branch staff observed she was very private when it came to her financial affairs. 

The woman corresponded with two private Westpac bankers, giving regular instructions by phone on transferring funds and reinvesting term deposits. 

One term deposit had $2.3 million invested. Another account held $305,000. 

On February 26, 2020, the daughter advised Westpac that her mother had onset dementia. 

A “vulnerable customer” note was loaded on her file advising staff to “take care with any large/unusual transactions”. 

The daughter forwarded a copy of her mother’s power of attorney for Westpac’s records, although she did not want to invoke it. 

The bank told the daughter it had to act on the mother’s instructions unless a doctor’s certificate was provided confirming she “lacked mental capacity to manage her financial affairs”. 

On July 6, 2020, the pensioner visited the bank with her daughter and withdrew $23,000 in cash, telling staff $3000 was for family birthdays and $20,000 to tide her over during the Covid lockdown. 

Staff did not have any concerns, noting on her file the presence of her daughter and writing: “She usually does do large cash withdrawals and she spends cash, this time it’s a lot more as she doesn’t think she will make it back to the bank for a while.” 

Two weeks later, the daughter invoked her mother’s power of attorney. The pensioner died a few days later. 

The family only learned about the unusual pattern of cash withdrawal while going through the late woman’s bank statements. 

The biggest withdrawal was $24,000 in May 2019, with more than $60,000 in cash drained from her account that month alone. 

Relatives tried to track the funds but believe more than $200,000 has disappeared. They suspect the beloved grandmother was the victim of financial elder abuse. 

Banking Ombudsman Nicola Sladden found Westpac had acted with reasonable care and skill. 

However, the Banking Ombudsman found there was no evidence to suggest the pensioner was being “unduly influenced”. 

Medical records provided to investigators did not certify she lacked capacity until July 21, 2020. 

Banks had a strict duty to follow a customer’s transaction instructions, the decision says, but must act with reasonable care and skill, and in accordance with good banking practice. 

After weighing the circumstances of the case, Sladden found Westpac had acted “in accordance with its obligations” when providing banking services to the pensioner. 

“These funds belonged to [her] and she was entitled to withdraw them and spend them as she saw fit.” 

Sladden did fault Westpac after staff shared information about the woman’s financial arrangements following her death with a former solicitor despite instructions from the daughter not to do so. 

Westpac apologised for the error and provided staff training. 

Westpac has been cleared of wrongdoing following an investigation by the Banking Ombudsman. 

Sladden also found Westpac did not provide timely information to the family following a Privacy Act request for the woman’s banking records. 

Although the seven-week delay was “frustrating”, it had no impact on the woman’s estate and no compensation was awarded. 

Westpac said it had nothing further to add to the Ombudsman’s decision, but earlier said the customer was “confident and savvy” with money, and tellers “ultimately acted on her instructions in processing the withdrawals”. 

The bank came under fire last year after it emerged the Banking Ombudsman had released recordings of the daughter’s phone conversations discussing her complaint with a watchdog investigator to the bank. 

The daughter believed it was a breach of her privacy and was later told she should have been consulted. 

Speaking this week, the daughter said she was not surprised by the Banking Ombudsman’s decision clearing Westpac. 

“I lost faith in this process the day I was told (by mistake) that they had released confidential phone conversations with me to Westpac. After this I believe we were just going through the motions. 

“My opinion is that the Banking Ombudsman is not a watchdog, but a guard dog – looking for ways to excuse and release the bank of any wrongdoing.” 

Sladden acknowledged the daughter’s dissatisfaction with the outcome of her complaint. 

“As an independent and impartial dispute resolution body, the scheme must be fair in all the circumstances. We conducted a thorough investigation into the complaint. The facts and findings are set out in our decision,” Sladden said. 

“The Banking Ombudsman Scheme was independently reviewed last year. The independent review found our decision-making fair in both processes and outcomes.” 

Lane Nichols is Deputy Head of ��һ�ǿ����� and a senior journalist for the New Zealand Herald with more than 20 years’ experience in the industry.