Feb.18.2008

Japanese Bankers Association

JBA Releases Measure on Illicit Deposit Withdrawals

On February 19, JBA executed an agreement requiring banks to compensate, in principle, depositors for illicit deposit withdrawals caused by stolen passbooks or Internet banking in which both banks and customer are not at fault.

This agreement is in response to the Depositor Protection Law, its supplementary provisions and incidental resolution for the Law which require banks to take necessary measures to prevent this type of crime and protect depositors.

Detail of the agreement is illustrated below.

ItemsStolen PassbookInternet Banking
(including mobile banking and telephone banking)
1. Customer to be compensatedIndividual persons
2. Requirement to receive compensationPrompt notification of banks
Adequate explanation to banks
Reporting of the theft to the policeExplanation of damages to the police (sincere cooperation)
3. Guideline for compensationNo fault on the part of depositors ⇒　Full compensation
Some fault on the part of depositors ⇒ 75% compensation※
(1)
When depositors leave passbooks at places where other persons can easily spot them, making them susceptible to theft.
(2)
When depositors keep passbooks together with withdrawal-claim-forms on which the registered seal has already been stamped.
(3)
When depositors keep passbooks together with the seal.
(4)
When there are other similarly negligent acts on the part of depositors.
Some or grave fault on the part of depositors ⇒ Will be handled on a case-by-case basisIt is difficult to define individual customer faults and corresponding compensations, since Internet technology and crimes thereof are becoming increasingly sophisticated on an almost daily basis and services and security measures offered by each bank vary. Therefore, compensation will be discussed after taking the circumstances of the damage being incurred into consideration.
Gross fault on the part of depositors ⇒ No compensation
(1)
When depositors hand passbook to another person.
(2)
When depositors hand withdrawal-claim-forms on which the registered seal has already been stamped to another person.
(3)
When there are other similarly gross negligent acts on the part of depositors
*
Above (1) and (2) will not be applied to cases in which ill persons handed these objects to their caregivers, provided that the “giver” handles them privately (givers are prohibited to handle them as part of their business).
4. OthersThere shall be no compensation when the bank was notified after more than thirty days from the occurrence of damages, withdrawals were made by relatives of concerned depositors, explanations were false, or loss of passbooks was caused by a social disorder such as a war or riot.
※
Percentage may vary by banks.