Mrs. Jones lost her debit card while on holiday abroad. Unauthorized transactions were made on her account using her PIN. The bank denied her claim, arguing she must have shared her PIN. Mrs. Jones wants to make a complaint to the banking ombudsman. The summary examines the relevant EFT code and determines that the bank would be liable unless it can prove Mrs. Jones contributed to the loss, as she reported the card missing immediately and there is no evidence she shared her PIN. The ombudsman would likely rule in Mrs. Jones' favor based on the information provided.

1. Running head: LAW 1
Drax Technologies
Student’s Name
University Affiliation

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Introduction
Mrs. Jones went to the bank to pick her Personal Identification Number (PIN) after
receiving her debit card. After this claim, she made an effort of memorizing the PIN without
writing it up or keep it in any way, and she maintained the secrecy of her PIN details. Mrs. Jone
used the card for six months without facing any issue until the card got lost in her house when she
was on holiday abroad. Upon realizing that her card is missing, she contacted her and the police,
and it was found out that the scoundrel had stolen from the card immediately by accessing the
Automated Teller Machine (ATM) on the first trial and thereafter. However, the bank did not agree
with the narration of Mrs. Jones about her claim about her card lost. Notably, the bank states that
the fact that the rogue might have made access to the ATM for the first time supports the point by
the institution that she might have given the PIN to someone, saved or unconcealed method of the
PIN with the card. Mrs. Jones wants to forward the issue to the Australia Banking Industry
Ombudsman (ABIO). This report tries to show how the matter will be dealt with and show the
party with the onus of resistant and with what repute.
Non-consumer liability
According to the Australian Banking Association (2014), the consumers are excluded from
a liability exclusively when the consumer and the bank that the loss has occurred due to the
following reasons;
i. The card has been forged, faulty, canceled or expired.
ii. The employees of the bank have been negligent or fraudulent
iii. Before the client received the card and Personal Identity Number which is the burden of
proof in the hands of the bank
iv. The clarity that the customer has not contributed to the losses

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v. The losses resulted from incorrect debit of the same amount to the same transaction more
than once.
vi. The loss occurred after the customer has been informed about that her card got lost, missing
or stolen or breach of PIN details.
These exclusions apply to Mrs. Jones’ case that the owner of the account is not liable for
damages that result from unauthorized cash transactions when there was enough evidence that the
customer did not contribute to the losses that were incurred.
Customer liability
When the above-outlined conclusions do not apply, the EFT Coding, clause 5.5 (a) shows
the circumstances under which the client is liable for unauthorized ATM transactions where the
customer is deemed as a contributing factor to the loss (Benjamin, 2017). Clause 5.5 (a) stipulates
that “in case the financial institution of the account proves that the client participated in any case
for the losses that were incurred, then he or she should be held responsible for the damages
occurring prior to the bank be alerted that a machine used as an access has been illegally accessed
or breach of security of the codes used to access the system” (Electronic Funds Transfer Act,
2018). Thus, according to clause 5.6, Mrs. Jones is held accountable for all damages from
unauthorized ATM cash transactions if, “she voluntarily disclosed PIN to anyone, indicated the
PIN to the ATM card or liable to simultaneous stealing with the ATM personal card, kept
undisguised details of PIN with any object accepted with the ATM card or has been careless in
protecting the security of the PIN (Australian Securities and Investments Commission, 2015). In
the case of Mrs. Jones, the onus lies on the bank since all of the events have not happened with the
client. The customer is liable only if the actual losses occurred before the bank was notified, misuse
of the ATM, or beach of PIN security.

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The provision of clause 5.5 (b) of the EFT Code is that, “where the bank proves that the
client has contributed to loss due to unauthorized cash transactions by the client postponing alerts
unreasonably after knowledge of loss, the client is liable for the losses that had occurred when
he/she became aware and not notify the bank” (Electronic Funds Transfer Act, 2018). Mrs. Jones
notified the bank immediately of the loss or theft, and thus, the liability of the damage occurs on
the bank and not the consumer.
Simultaneous loss of the ATM card and PIN
In Australia, the Coding of Banking Practice, under the necessities of the Australian EFT Code
states that the cardholder should not participate in the stealing or misplacement of the debit card
or the PIN (Electronic Funds Transfer Act, 2018). This matter weighs evidence according to the
following ABIO principle;
i. ATM card kept in the safe
When Mrs. Jones was going to the overseas holiday, she wished to put the card in a safe place in
her home. Though she had gone through a lot of trouble to keep the card in the safe, under the EFT
code clauses 5.5 and 5.6, it shows that she had kept her records of PIN with the debit card in the
same place, meaning that she is liable for the theft (Electronic Funds Transfer Act, 2018). In this
case, the bank is not responsible for the loss suffered by Mrs. Jones.
ii. ATM in the wallet and PIN in the safe
Mrs. Jones might have placed her undisguised details of the PIN in the impostor at her
residential and retained her ATM card in her file, which she usually carries with her. A question
that will arise from the Ombudsman is if her card was in her wallet and her PIN in the safe in her
house, then does the simultaneous theft as a result of the card and PIN or did Mrs. Jones leave her

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wallet in her home too (Hunter, 2014). In this case, the Ombudsman can conclude that the portfolio
was in her apartment at the time of the theft and thus the liability does not lie on the simultaneous
loss of the PIN (ABIO, 2016). Accordingly, the bank could be ordered to bear full responsibility
for the damage.
Access of the ATM at first attempt
There is much confusion where the transaction at hand results from access of the correct
PIN on the first trial in an unauthorized ATM cash transaction. As per the revised Electronic Funds
Transfer Code states that, ABIO could comment that even though it is not convincing that Mrs.
Jones has resulted to the damage, it is an essential aspect in finding out whether an undisguised
record of PIN, might have been reserved with the ATM card and so the response of simultaneous
theft or loss lies on both (Reserve Bank of Australia, 2015). This ABIO’s resolution is not
grounded on the mere assignment of liability of proof but the strength of the amount of the
available information (ABIO, 2017). Since the bank said that Mrs. Jones was responsible for the
withdrawals as the correct PIN was applied at the first trial. The Ombudsman will determine the
weight of information to conclude that the cash withdrawals were not transacted by Mrs. Jones
because there was any evidence that the PIN was illegally accessed by an unauthorized person
with the ATM card simultaneously as the card was the only stolen thing. The most likely situation
is that the rogue had shouldered Mrs. Jones at the ATM and that she had not revealed the PIN
voluntarily or did not irrationally delay notice of the theft to the police and the bank. So,
Ombudsman will determine that Mrs. Jones did not make any contribution to the damages arising
from the unauthorized cash withdrawals, and thus, the financial institution should be liable.

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Conclusion
Despite the revision of the EFT Code that seeks to burden all the proof to the bank in an
even of unauthorized ATM transaction, the problem will remain square in the hands of the client
due to the significant weight of the proof of the exact PIN at first trial clause. The latter is seconded
by the point that, nevertheless ABIO will determine that Mrs. Jones has not to get involved in the
ATM cash transaction as she was overseas, or did she authorized it and that the bank cannot justify
the fact that she contributed to balance of probability losses, she will still remain the suspect of
loss or theft (ABIO, 2018). However, there is a chance Mrs. Jones was shouldered during the six
months she used her card. Mrs. Jones will enjoy this benefit of the interpretation of ABIO of
clauses 5.5 and 5.6 of the EFT Code. Still, she will not be cleared the liability for the loss. Thus,
under EFT Codes' terms, the onus will probably rest in the hands of the bank. If the bank will not
establish a decisive mistake of the uncertain ATM cash transaction, or fail to debit client’s account
of the client with the disputed amount, it will not debit the account of the client with disputed ATM
transaction amount. Moreover, the provision of the EFT Code clause 10 states that, if the bank or
its staff does not discern liability apportionment and complaints as states by the EFT Code, it will
be responsible for the complete disputed sum of the ATM cash transaction in which the failures
resulted from unreasonable delay in resolution.

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References
Australian Banking Industry Ombudsman Limited. (2016). Annual Report, 2015/2016, 26.
Australian Banking Industry Ombudsman Limited. (2017). Annual Report, 2016/2017, 28.
Australian Banking Industry Ombudsman Limited. (2018). Annual Report, 2017/2018, 23.
Australian Banking Association. (2014). EFT in Australia: Issues and Problems (2014) 4-5.
Australian Securities and Investments Commission. (2015). Report of Compliance with the EFT
Code of Conduct, 2015/2016 (2017) 6.
Benjamin, G. (2017). 'Consumer Protection in Electronic Funds Transfers' (Research Paper for the
Office of Consumer Affairs, Industry Canada, 21 March 2017) 115.
Electronic Funds Transfer Act. (2018). 15 USC § 1693 (1978) and Regulation E, § 205.6 (1981).
Hunter, A. (2014). Litigation: Evidence and Procedure, above n 43, 698-9, 716-23; and, see, J D
Heydon, Cross on Evidence (7th Australian ed, 2014); Butterworths, Concise Australian
Legal Dictionary, above n 43, 44, 60; and the Definitions provisions of the Evidence Act
1995 (Cth).
Reserved Bank of Australia. (2015). National Internet Banking – Product Disclosure Statement
Including Terms and Conditions (10/2015).