PIN mailed to wrong address

A client opened an offshore US dollar savings account through the Canadian branch of a foreign bank. For regulatory reasons, the Canadian branch's role merely to pass on the account opening information to the international head office. The servicing of the client's needs was to be done by the foreign bank directly through its call centre.

After the account was opened the client deposited about USD $200,000.

The client subsequently relocated from Canada to the US. The client mentioned the relocation to the bank's branch in Canada and left with the impression that no further action was required from her.

In the meantime, the foreign bank sent an access card to use at ABMs to the customer's former Canadian residence using a courier service that did not require a customer signature.

The foreign bank then sent the PIN for the access card in a separate package to the Canadian address, also by courier requiring no signature.

Someone other than the client received both the access card and PIN. Over the period of several months, the entire balance of the account was withdrawn.

Months after moving to the US, the client checked with the foreign bank and discovered the money was missing. She filed a police report and asked the bank to replace her missing funds.

The bank said that the access card and PIN were sent to the last known address on record using their standard procedures. They said the client was responsible for informing the foreign bank of her change of address. There was no record of her informing them of the change. The Canadian branch was not permitted to service the account and therefore any conversation the customer may have had with them did not relate to her account or relationship with the foreign bank. The foreign bank denied her compensation, and she appealed to OBSI.

While the foreign bank was not a participating firm, the Canadian branch was. Following our review of the complaint, we concluded that compensation was appropriate. OBSI discussed the matter with the staff of the Canadian branch of the bank and sent a package incorporating our analysis to the head office. We believed that it was reasonable for the client to think that she had given the bank her new address since she was not told by the Canadian branch to either contact the international contact centre, or that it could not act on her information. Based upon our analysis and our assessment, the foreign bank compensated the client for the lost amount plus interest at the rate that the funds would have earned in the account.

(2008)