The Athens Court of Appeal, with its recent decision no. 4177/2022, attributed gross negligence to a bank which, through one of its employees, transferred a sum of money from the plaintiff’s account to the account of a third party without taking all necessary identification measures at the time the transfer instruction was given.
Specifically, according to the case history, when the plaintiffs and rightful account holders discovered a transfer of €26,000 from their account to a third party’s account, with whom they had no relationship or transaction, they disputed the transaction. Upon contacting the bank, they were informed that the bank had received a written instruction via email, allegedly signed by the account holders, requesting the transfer of the amount to a third party’s account.
The first-instance court ordered a handwriting expert examination, which showed that the instruction was forged and did not come from the plaintiffs themselves. Consequently, the court ruled that the instruction was given by a third, unknown person who had hacked the plaintiffs’ email address and other personal data to create the forged document.
The bank, which carried out the transaction through its employee, was found grossly negligent for failing to take all necessary steps to verify the true identity of the person requesting the transfer (e.g., telephone or other type of communication with the account holders before executing the transfer). The court further noted that because it is now very common for transfer instructions to be given via email or similar means, banks must organize their operations in a way that ensures the identification of the sender and eliminates or minimizes the risk of payment to an unauthorized person. Since the bank failed to exercise due diligence in this transaction, as in this case, it bears liability for the payment of the amount to a non-entitled third party.
Finally, the appellate court confirmed the first-instance court’s finding that no compensation for moral damages is owed here, as the bank’s liability is purely contractual under their deposit agreement, for which no moral damages are prescribed by law.
