Ombudsman ordered bank to reimburse money to child's account after father withdrew €66,000

The financial services ombudsman has released his decisions from the second half of last year.

A FATHER WAS found to have wrongfully been permitted to withdraw €66,000 from his young daughter’s junior bank account, according to the latest release of decisions from the Financial Services and Pensions Ombudsman (FSPO).

The ombudsman today published decisions issued during the second half of 2020. The decisions are listed online and in a publication containing summaries and case studies of some of these decisions. 

One case study given referred to a situation involving a young child’s bank account. It outlined that Daisy’s* parents opened a junior bank account on her behalf when she was three months old. 

Between 2008 and 2014, child benefit payments for a number of children and some additional benefits were credited and ongoing debits were recorded in the account. 

Her father was authorised to make withdrawals until Daisy reached seven years of age, after which time the child would become the signatory. 

But after she turned seven, Daisy’s father continued to withdraw from the account until almost all the money was taken out. 

After Daisy’s seventh birthday, a large volume of debts totalling around €66,000 had been withdrawn by the father.

The child said she was unaware of the existence of this account and requested that the bank refund the money withdrawn. 

She said no consent was ever given to her father allowing him to withdraw funds after she turned seven. 

The bank had claimed that Daisy’s father said the money was managed by him and was used for the benefit of the family, but the ombudsman said it was “entirely unclear as to how the bank formed this opinion”. 

“The Ombudsman took the view that there was no valid signing authority on the account
once Daisy turned seven; that her father’s withdrawals did not meet the required mandate on the account, and were therefore wrongfully permitted,” the publication said. 

The ombudsman upheld the complaint and directed the bank to reimburse the account with the withdrawals worth €66,000, plus interest.

Tracker mortgages

The ombudsman’s online database of decisions from complaints now has more than 1,000 decisions issued since the FSPO was established three years ago. 

In a statement on today’s published decisions, the ombudsman Ger Deering said tracker mortgage complaints “continue to comprise a considerable amount of the work” of his office. 

“I have upheld a number of tracker mortgage complaints, where I concluded that the compensation awarded to the complainants was not adequate,” Deering said. 

He added that a “considerable number” of tracker mortgage complaints are “based on unrealistic expectations”. 

“There seems to be a lack of understanding that for a person to have an entitlement to a particular tracker interest rate, there must be some contractual or other obligation on their bank entitling them to such a rate.” 

*The FSPO did not use real names for its case studies.

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