A former Taranaki man working in Saudi Arabia learned money he sent home to pay bills had been seized under an anti-terrorism act.

Michael Shaskey says Kiwibank froze US$2600 ($3265) he sent to his New Zealand account under the Anti-Money Laundering and Countering Financing of Terrorism Act.

Shaskey, who has been teaching in Saudi Arabia since June, said he only learned the funds had been sequestered after several messages to Kiwibank went unanswered and he threatened to go to the Banking Ombudsman.

"Six days of frustration and head-scratching, when I wondered if I would ever see my money again," he said.

"Then, when I upped the ante, it turned out that some overzealous keyboard-jockey in Kiwibank had seized my money but ignored my messages."

Kiwibank acting complaints manager John Timms did not want to comment on the situation yesterday.

The act, which is overseen by the Ministry of Justice, seeks to find and stop money laundering and the financing of terrorism.

It requires banks to collect information about their customers to ensure their understanding of a customer's business with them is accurate.

The Ministry of Justice was unable to comment yesterday but in advice released when the act came into effect in June, it described suspicious transactions as "ones which are inconsistent with a customer's known, legitimate business or personal activities".

Shaskey said before he left New Zealand he contacted Kiwibank to notify them he was moving and would be making money transfers from Saudi Arabia.

He says he was not forewarned about any implication of the act.

"I am a properly identified customer, sending money to myself," he said.

"And it wasn't even a very big amount.

"Nobody could accuse me of being unknown to the bank, or secretive, but they sure were ... totally indifferent and unresponsive."

Shaskey said he felt handling of the matter had been "amateurish" and despite the funds since being released, he was still going ahead with the complaint to the Banking Ombudsman.

"It is a very serious matter, indeed, to take someone's property without due process of the law - no matter who you are.

"The part of this I really don't understand is why, half way through working out what was going on, Kiwibank loaded an overdraft onto my account - without being asked to," he said.

The Banking Ombudsman was unavailable for comment.