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An internal oversight at Westpac permitted at 21 year student to overdraw an account by $4.6 million.
Allegedly, an account was opened by the student in 2012 with no overdraft. In 2013 fraud complaint prompted the account to be investigated, though no fraud was found.
Apparently the internal practices of Westpac was that the branch were the account was opened held responsibility for monitoring accounts in overdraft. However, when an account is investigated for fraud, the status is changed such that the branch no longer receive the relevant reports.
The apparent issue was that the account status was never changed back after the fraud investigation was concluded.
With no one monitoring the account, the student progressively went on a spending spree buying designer handbags, jewellery, clothes, etc
It was not until the student put over $1M in transactions in one day through PayPal that an internal team at Westpac noted the account and promptly sought to rectify the problem.
As widely reported by the media, the student debtor was arrested at the airport attempting the fly back to Malaysia.
The matter is now before the court with criminal charges put forward.
Source: Sydney Morning Herald