In short
Only in special cases can there be an extra-contractual duty of care on the part of a bank in the interests of third parties. In this case, when opening a bank account, there was insufficient reason for ING to have to understand that there was a serious danger that the account would be used for fraudulent acts that would cause damage to the foundation or its debtors. Also while using the bank account, there was no reason to block the account, because ING was not aware (or should not have been aware) that the payment transactions on the account were fraudulent.
Facts
What was going on? Suppliers sold building materials to a foundation. The foundation resold the building materials and received the purchase price, but did not pay the suppliers of the building materials. Once the sales prices for building materials were paid into the foundation's account, the director withdrew these amounts in cash (and thus were withdrawn from the foundation's assets).
The trustee of the foundation held ING liable for, among other things, breach of its duty of care to the foundation and the joint creditors.
The trustee accuses ING of not/insufficient customer due diligence on the foundation when opening the bank account. The foundation had been dormant for years when suddenly an application for a bank account was made by a one-member board, while that board member had been placed under administration and had shortly before been convicted of fraud (a "cat-catcher" in the trustee's view). The foundation operated from a social rental house in the very poorest hamlet in the very poorest part of northeastern Groningen and claimed from nowhere that an annual turnover of €500,000.00 to €1,000,000.00 could be generated. In addition, ING should have blocked the account immediately after the first cash withdrawal.
Verdict
- No special duty of care by ING to protect against fraud driver
ING consulted the UBO register and the incidents register (EVR) under the Money Laundering and Terrorist Financing Prevention Act (Wwft) when opening the business bank account. It followed that the director was authorized to represent the foundation. ING was not obliged to additionally consult the Central Register of Curators and Administrators or to inquire about the director's criminal past, the court said.
The initiation of commercial activities, the director's home address nor the expected high turnover did not need to alarm ING or force it to conduct further customer due diligence.
The court first of all stated that there was no special duty of care on the part of ING to protect the foundation or its creditors against fraud by the director. Furthermore, the facts put forward by the trustee did not imply that ING understood or should have understood when opening the bank account that there was a serious danger that this account would be used for fraudulent acts as a result of which the foundation or its creditors would suffer damage. The court concluded that ING had not acted unlawfully.
- No obligation to block bank account
This is not banking fraud; that is, using the account contrary to its intentions. It is a case of non-bank fraud by an authorized representative of the account holder/foundation who carried out authorized payment transactions (read: withdrew amounts in cash). The court held that there was no evidence that ING was or should have been aware that these payment transactions were fraudulent.
Thus, the conclusion is that only in special cases in the interest of third parties can a specific extra-contractual duty of care be assumed. After there was talk of the cash withdrawal of substantial amounts, ING requested and received further information on a number of occasions. In doing so, the bank verified that the stated business activities were actually being carried out. After consultation with ING, the director decided to close the account.
Given this course of events, the court cannot pinpoint a time when the account should have been blocked. Like the court, the court rejects the trustee's claims.
Conclusion
ING performed the required customer due diligence at the start of the credit relationship. It did not have to investigate possible other circumstances on its own initiative, as there was no reason to do so at the start of the relationship. The duty to investigate when entering into a credit relationship is limited by the statutory framework and not also by a duty of care towards third parties.
Also during the relationship between bank and customer, ING fulfilled its obligation to investigate by asking timely questions about the substantial cash withdrawals. In retrospect, there was no time when it should have blocked the foundation's bank account for cash withdrawals.
A bank's duty of care does not extend to protecting third parties from fraudulent use of a bank account in a situation such as this, when the bank has fulfilled its duty of inquiry about the customer and the significant cash withdrawals.
