Split Enz wrote a song about history never repeating, but unfortunately for Westpac it's simply not the case after a banking error saw an Australian student overdraw her account by NZ$4.9 million.

It's only seven years ago Westpac in New Zealand gave Bay of Plenty service station owner Leo Gao a $10 million overdraft, instead of the $100,000 he'd requested.

Christine Jia Xin Lee received an accidental $4.9 million from her bank. Photo: NSW Police.

Reports from Australia media say Christine Jia Xin Lee, 21, was arrested earlier this month at Sydney Airport as she tried to board a flight home to Malaysia using an emergency-issue passport.

The chemical engineering student opened an account with Westpac one month shy of her 18th birthday in 2012, and, over an 11-month period in 2014 and 2015, allegedly took advantage of an unlimited overdraft accidentally given to her by the bank.

Lee spent her ill-gotten gain on designer handbags and clothes.

The events are similar to what happened in Rotorua in 2009, when Leo Gao was mistakenly given a $10 million overdraft.

Gao fled to China with girlfriend Kara Hurring and several of their family members, after transferring $3.8 million to other accounts.

Leo Gao was also mistakenly given a $10 million overdraft by his bank. Photo: YouTube.

The pair evaded authorities for nearly two and half years.

Hurring was arrested in February 2011, when she returned to New Zealand to renew her daughter's passport.

She was found guilty of 30 charges of theft, dishonestly using a bankcard and money laundering, totalling $256,000, and was sentenced to nine months' home detention and ordered to pay reparation of $11,800 to Westpac.

Gao was extradited to New Zealand in December 2011 after trying to cross the border from China into Hong Kong.

He pleaded guilty to seven charges of theft totalling $6.7 million, and was sentenced to four years in prison, but served just over two years of the sentence.

Westpac recovered $2.9 million of the stolen money soon after Gao and Hurring fled in 2009. It was not clear how much of the outstanding money Gao still controlled.

The Westpac staffer who made the error was later fired.

Lee's extraordinary spending spree saw most of the $4.6 million spent on designer handbags, clothing, jewellery, sunglasses and scarves.

In a statement of claim tendered in court, Westpac said Lee opened a statement account with no overdraft at the Haymarket branch in 2012.

But in 2013, an alleged victim of fraud claimed some money had been fraudulently paid into Lee's account.

As is common protocol, Westpac put the account into "PCO Status", thereby freezing transactions, and into "Manager 321 Status", which meant the account was no longer being monitored by the Haymarket branch.

After a week of investigating, the transaction was deemed to be legitimate so the PCO Status was removed, but the "Manager 321 Status" was not removed, meaning the Haymarket branch wasn't monitoring the account.

As a result, it was possible for Lee to make limitless withdrawals without being them being dishonoured and without the bank being alerted to the overdrafts by the Haymarket branch.

At the time of her first overdraft on July 22, 2014, Lee had a bank balance of A$5.86. By the time the bank finally caught on, her balance was a debit of A$4,655,876.02.

It was not until April 7, when Lee made 14 transactions in one day to her PayPal account totalling A$1,165,719.95, that an alert was triggered with the bank's Product Risk unit.

Westpac has argued she signed terms and conditions that included an agreement she wouldn't overdraw the account and she would notify the bank of any errors or unusual transactions.

They were able to retrieve the money transferred to PayPal on April 7 and seize hundreds of handbags and other designer items, but Lee is still about A$3.5 million in debt.

She told bank investigators she thought her wealthy parents in Malaysia were putting the money in her account, The Sydney Morning Herald reported on Sunday.

Westpac has pursued Lee through the New South Wales Supreme and Federal Circuit courts to declare her bankrupt and seize her possessions.

With fears she would flee to Malaysia without paying off her A$3.5 million debt, she was put on an airport watch list.

Westpac will not say how common the mistake is but hopeful customers are unlikely to find themselves in a similar situation.

"We are constantly reviewing our systems and processes, and have taken comprehensive steps to safeguard against this incident from recurring," says a bank spokeswoman.

- additional reporting Stuff.co.nz and Sydney Morning Herald