- ATMs (Automated Teller Machines)
- Business finance
- Cash/cheque scam
- Closure of accounts
- Consumer finance
- Credit bureau blacklisting
- Credit cards
- Current accounts
- Distress and inconvenience
- Fees and charges
- Ignoring instructions
- Instalment sale agreements
- Interest payable on student loan
- Mortgage finance/home loans
- Payment systems
- Petrol cards and garage cards
- Property in possession
- Savings account
- Unauthorised transfers
- Vehicle finance
- Wrong account number
The complainant converted his account to another package on receipt of
an advertising brochure from the bank. This brochure included a reference
to a cover for the debt in the event of death and disability. The complainant
thought that the cover would automatically be in place if he converted
to the new package. When he wanted to institute a disability claim, he
found that no policy was in place, as he had not applied for it specifically.
The bank conceded that the advertising could have been misleading and
suggested that an independent party look at the medical evidence and establish
whether the complainant would have been able to claim if a policy had
been in place. The independent party found on the medical evidence that
had a policy been in place, the complainant would not have been able to
claim in terms of the definition in the policy of permanent disability.
The complainant was the victim of a scam at an ATM. His card and PIN were
later used to make a pin pad withdrawal at a teller. The complainant was
found to have been negligent in accepting help from a stranger and in
letting the stranger see his PIN. However the bank did not specifically
inform the complainant regarding the possibility of pin pad withdrawals
and the complainant was not aware of the risk, having never made such
a withdrawal. It was found that the complainant had been exposed to greater
risk than the bank had informed him of such facility. The bank reimbursed
the complainant half of his loss.
The complainant was the victim of an ATM scam whereby the ATM card reader
is rigged to retain the card. The victim leaves without the card thinking
the ATM has lawfully retained it. The thief, having observed the PIN when
the complainant entered it, then retrieves the card and uses it for fraudulent
withdrawals. The complainant immediately phoned the bank and took steps
to prevent anyone from approaching the ATM. It was found to be highly
likely that the complainant entered her PIN without waiting to be prompted
to do so by the ATM. She was thus negligent to a certain degree. However,
she thereafter took immediate steps to prevent her loss. Our recommendation
that the bank reimburse her for half of her loss was followed.
The complainant approached an ATM in order to make a withdrawal. The person
ahead of him at the ATM was just completing his transaction, and was removing
his card. The complainant approached the ATM and noticed that the screen
did not return to the screen usually indicating the beginning of a transaction
and requesting one to enter your card. Instead the screen requested a
ten-digit number. The complainant was about to walk away, thinking that
the system was down, when the aforesaid person came to his assistance
and suggested that the machine had the same problem when he transacted,
but that the complainant should enter his PIN number and the machine would
then function in a normal manner. Although suspicious, the complainant
accepted assistance from the stranger. The ATM screen did not change at
all, and it became apparent, to the complainant, that his card was retained.
He attempted to cancel the transaction, to no avail. The stranger disappeared
as soon as the ATM accepted his card. The complainant immediately reported
the incident through contacting the bank's toll free number from his cellular
telephone, and stopped his card. The criminal managed to withdraw funds
up to the complainant's credit limit, minutes, prior to the complainant
stopping his card. As far as we are aware and based on what we have been
shown one cannot access an ATM without the correct card and PIN. This
is a typical card swapping scenario where the criminal under the pretence
of rendering assistance, swap's the complainant's card and obtains his
PIN number, in this instance, as complainant entered his PIN number without
the ATM prompting him to do so. The bank cannot be said to be liable,
as the complainant was the victim of a criminal who obtained both his
card and PIN. The complainant was negligent in allowing a stranger to
assist him and by entering his PIN without the ATM prompting him to do
The complainant attempted to make a withdrawal from an ATM machine. The
complainant's card was retained by the ATM machine, and despite him pressing
the cancel button; he was unable to retrieve his card. The complainant
immediately rushed home to report the incident and stop his card via the
toll free number of the bank. The complainant was informed that funds
were withdrawn from his account within minutes from him leaving the ATM,
in an amount equal to his daily withdrawal limit. The same criminals more
than likely observed keying in his PIN number, subsequent to his card
being retained in an ATM machine, rigged the complainant. In this instance
the complainant more than likely entered his PIN number without being
prompted to do so, constituting negligence. The bank has a duty to provide
safe and secure payment systems. Criminals rigged the bank's ATM machine
in order to enable them to obtain the complainant's card. We suggested
that the bank bears 50% of the loss of the fraudulent withdrawal.
A complainant went to withdraw money from an ATM, but found that his card
popped out when he tried to insert it. A well-dressed person approached
him to 'assist' mentioning that he had had a similar problem at an adjoining
ATM. The complainant suddenly realised that his card had been stolen from
him. He first tried to locate the thief and rushed to report the loss
of the card by getting his wife to telephone the bank's emergency number
on her cell phone. He discovered later that two withdrawals of R1000 each
had been made from his account. One was made shortly after the card was
stolen while the other was made on the following day. The bank refunded
the latter amount to him, as the card should have been stopped by then.
However, the former amount was not refunded because the thief managed
to withdraw the funds before the card was cancelled and the complainant
had been negligent in accepting help from a stranger and apparently keying
in his secret PIN number in front of him.
Complainant had her card stolen from her purse / shopping bag. On realising
that her card was stolen she immediately contacted the Lost Card Division.
She was advised that funds were fraudulently withdrawn between her discovering
that her card was missing and her reporting it. Complainant states that
she gave no-one access to her PIN number and that the document containing
her PIN number was destroyed when the card was issued initially. The complainant
holds the bank liable for her loss. As far as we are aware and based on
what we have been shown, one cannot access an ATM without the correct
card and PIN. The most likely conclusion we could come to is that the
complainant probably compromised her PIN number by keeping it written
down in her handbag with her card, constituting negligence. The bank could
not have prevented the theft of the complainant's card, but prevented
further loss, the moment they were informed to stop the card.
This office dealt with an ATM rigging matter in which the complainant's
representative indicated that "she was alone and is adamant that
she did not speak to no-one, nor did she ask bystanders for help".
The bank furnished us with the video footage of the incident that clearly
indicated that she spoke to two other people and two security guards when
she realized that her card was stuck. The complainant was dismissed on
the grounds that the complainant misled this office as to the facts of
The complainant applied for a long-term commercial loan at the Bank. He
was not asked to complete an application form. The application was declined
after 4 weeks and only after his numerous requests to the Bank for a response
to it. The complainant alleges that his white neighbour was granted a
loan on a vacant piece of land for the same amount whereas his was declined
on land that had structures on it. The complainant therefore believes
that the bank discriminated against him on the basis of his race. The
bank claims that the declining of the said loan was based on their purely
commercial discretion and that we thus had no jurisdiction to intervene.
The complainant has failed to provide us with any concrete evidence of
the allegations of racial discrimination. We have addressed questions
to the bank relating to the delay in response to the complainant as well
as to the fact that if the it was a policy decision than surely the complainant
could have been advised of same sooner. In our Initial Assessment we made
an award of R1 000-00 to the complainant for distress and inconvenience.
The complainant sold a computer to an unknown person on the understanding
that it would only be delivered once cash had been paid into his bank
account. A deposit slip reflecting a deposit of R10 000 cash was handed
(not faxed) to him. As the bank was closed, the complainant established
at an ATM that the amount reflected in his account. The computer was handed
over. The deposit turned out to be of a stolen cheque and not cash. The
name of the drawer of the cheque appeared on the original deposit slip,
but not on the duplicate.
On the strength of the first transaction, the complainant sold another
computer to the "brother-in-law" of the same person and was
paid by cheque. The complainant said he would not have entered into the
second contract if the teller had not been negligent in respect of the
first transaction. The Bank indicated that the complainant was a victim
of a scam and referred to certain markings on the duplicate copy of the
deposit slip. It contended that people should exercise extreme caution
before releasing their goods to unknown customers: The complainant was
accordingly grossly negligent. The duplicate deposit slip was sent by
the Office to the forensic department of the S A Police, which could find
no indication of tampering. This information, coupled with a visual examination
of the duplicate deposit slip, lead the Office to conclude that nothing
had been written in the block provided for the drawer's name. The Bank
does not dispute that the same teller stamp appeared on both the original
and duplicate copies of the deposit. From a study of decided case law,
the Office concluded that a banker has a duty to see that duplicate deposit
slips accurately reflect the amount of cash received and that the bank
was delictually liable for its failure to take reasonable precautions
in this regard. The Office found against the complainant on the second
claim on the grounds that he should have taken greater precautions himself.
A different decision may have been reached had the bank led the complainant
to believe that an earlier cheque from the same drawer was good.
The complainant sold a machine to a person who contacted him by phone.
The purchaser told the complainant that he had deposited the purchase
price in cash into the complainant's account. The complainant checked
his account using an ATM. The statement showed that a deposit had been
made and was available to be drawn. The complainant, on the strength of
the deposit, released the machine to the purchaser. Later the complainant
was informed that the deposit was in the form of a fraudulent cheque and
that the deposit had been reversed out of his account. The complainant
was unable to contact the purchaser. We established that the complainant
did not check with his bank to confirm whether the deposit was in cash
or a cheque: he merely assumed it was cash since the money was available.
The bank stated that all cheque deposits to his account had been immediately
available for a number of years. The complainant should therefore have
been aware of the possibility of the deposit being a cheque. The ATM slip
would have indicated whether the deposit was in cash or a cheque. We assessed
the bank's offer of accepting 25% liability for the loss suffered as being
reasonable. The complainant accepted this assessment.
A trading firm received cheques on a regular basis from one of its customers
and deposited the cheques to its account. Over a period of time several
of the cheques had become lost in the banking system and the amounts thereof
were re-debited to the company's account. The firm suspected foul play
in that it suspected that there had been collusion between its customer
and the customer's own bank to get rid of the cheques. The customer's
bank investigated the matter and denied any such collusion. As this office
does not have the powers or the resources to investigate such matters
it could not either confirm or deny the bank's finding. Furthermore, it
appeared that the firm had not taken sufficient steps to obtain duplicate
cheques in order to minimise its losses. In all the circumstances this
office decided that it could not assist the company and closed its file.
The complainant, a close corporation, claimed the amount of a non-transferable
cheque made payable to him, but which was deposited by one of its members
to an attorney's trust account at the bank. The bank declined to meet
the claim on the basis that there was probably a dispute between the members.
We were not in possession of sufficient evidence to enable us to determine
whether the close corporation had suffered a loss or not as it may have
owed the amount to the member/s. However, we recommended that the bank
pay a substantial amount to the complainant for the inconvenience the
bank caused by not crediting the account of the payee. The complainant
did not accept our recommendation and apparently intends to take legal
action against the bank.
Complainant advertised a diamond ring in the newspaper, and accepted a
bank guaranteed cheque to the value of R15 000. The complainant handed
over the ring without confirming the authenticity of the guarantee. After
depositing the cheque the complainant was informed by the bank that the
cheque had been stolen, and that the bank could not make payment thereon.
Our office was unable to assist the complainant as the complainant's loss
was as a direct result of the fraudulent behavior of the purchaser. The
complainant should have verified the following with the bank before handing
over the ring: · Was the cheque in fact guaranteed? (Fraudsters
often forge bank guarantees.) · Was the cheque stolen? It would
however be prudent to obtain special clearance on the cheque, and only
once the bank confirms that the cheque has been paid, to hand over the
Complainant operated a supermarket. He received cheques as payment for
goods. Marked "NOT TRANSFERABLE". These cheques were accepted
by the bank for the credit of his account, a practice that had continued
over a fairly lengthy period, which, no doubt, caused the complainant
to continue accepting such cheques as payment. Later, on notification
from the drawer/drawee that the cheques were stolen; the bank reversed
all the disputed cheques. This however occurred, in some instances, almost
a year after the cheques was deposited. The bank argued that he was not
the payee and as such not entitled to the cheques and they were therefore
justified in debiting/reversing the amounts. The OBS argued that, notwithstanding
the fact that he was unaware that the persons presenting the cheques were
not the true owners (despite providing positive proof of identification),
the bank were not entitled to debit the account, even though the true
owners (drawer) had a claim. The bank by accepting the cheques initially
contributed to the loss; by creating the impression that all was in order,
despite the restrictive crossings. Whilst it was agreed that the bank
could institute a legal claim to the money, this would need to be proceeded
with in accordance with the applicable legislation, as opposed to unilaterally
debiting the account. It was proposed that the bank refund 50% of the
total loss suffered, in addition to refunding the interest accrued since
the reversal of the first cheque, this settlement being accepted by the
The complainant issued a cheque to a contractor for work done. After issuing
the cheque, the complainant realized that the work had not been done properly
and stopped payment on the cheque, using Internet banking. The bank, however,
did not stop payment on the cheque and the contractor received the funds.
The cheque had been issued on Friday, 31 August 2001 and had been cancelled
on Monday, 3 September 2001, at 14:07. The bank stated that it could not
interfere with a dispute between the complainant and a contractor and
therefore it did not stop payment on the cheque. After researching relevant
case law and statutory law, it was established that the drawer of a cheque
has the right to countermand payment on a cheque he has issued. In the
circumstances of this complaint, the complainant had until the close of
business on Monday, 3 September 2001 to stop payment on the cheque. The
instruction to cancel the cheque was therefore given within the time allowed
and the cheque should have been stopped. A ruling was made that the bank
pays the complainant the value of the cheque, his wasted costs in trying
to sue the contractor and an amount for distress and inconvenience. The
bank complied with the ruling.
In each of 3 complaints with similar facts, the complainants dealt with
a broker to make an investment on the stock exchange. The complainants
were advised to draw cheques in favour of the bank as the first step in
making the investment. The broker told them an individual trading account
would be opened with the bank for each investor. Cheques were drawn by
each complainant and handed to the broker. The cheques were collected,
contrary to the crossings and restrictive markings, for an account of
a close corporation that the broker was the sole member of. The broker
used the funds for his own purposes and not for the investments they were
intended for. The office made a ruling that the bank had collected the
cheques for someone that was not entitled thereto and that it had to refund
the complainants the full face value of the cheques. As it was not possible
for the bank to have collected the cheques for an account in its own name,
it should either have refused to collect the cheques or have contacted
the drawer thereof for instructions.
The complainant's new chequebook was collected at the bank by a fraudster.
The bank became aware of the error and issued a letter of explanation
in the event that the stolen cheques were used. The perpetrator did in
fact draw several cheques. The bank dishonoured the cheques. The complainant
started receiving calls from the various beneficiaries of the cheques
demanding payment. He had difficulty in explaining the situation each
time. He also received visits from debt collecting agencies and letters
of demand. When the complainant complained about the consequences of the
bank's negligence in allowing the fraud to take place, the bank offered
a letter of apology and an amount of R1 000. Ultimately, this office recommended
that an amount of R8 000 was reasonable compensation for the distress
and inconvenience the complainant suffered.
This office posed various questions to the bank in our step 3 letter to
enable us to better understand the working of the bank's cheque verification
system. The bank did not respond by the due date and our office reminded
the bank that should they not give us the information as requested; we
would assume that the evidence is against the bank. This office proceeded
to compile an initial assessment of the matter as the bank failed to respond
to our second due date, finding that the evidence was against the bank.
Our recommendation was that the bank should pay the complainant the amount
as claimed. Both the bank and the complainant were however entitled to
make further submissions after receipt of the initial assessment, and
the bank was therefore afforded yet another opportunity to furnish us
with the requested information. The bank however indicated that it had
no further comments, upon which the initial assessment was made a final
adjudication. An example of a matter where the bank's lack of co-operation
led to it having to pay R10 800, where the merits of the matter appeared
to be in the bank's favour.
The complainant drew a cheque in favour of the bank's card division to
pay her husband's credit card. Although the cheque was crossed and marked
"not negotiable", the words "or bearer" were not deleted.
The cheque was intercepted in the post and was presented at one of the
bank's branches. The proceeds of the cheque were credited to three accounts
unknown to the complainant. It was concluded that although there was an
agreement that the complainant could send the cheque by post, it had to
be drawn in a proper business fashion appropriate to the amount. This
included that the cheque should not have been made payable to bearer.
Although the cheque was crossed and marked "not negotiable"
it still remained a bearer cheque and the thief therefore was able to
present it for payment. The complainant's husband could not argue that
his credit card account had been paid, due to the manner in which the
cheque was drawn.
A previous business partner that owed him money paid a cheque into the
complainant's account in October 2001. The cheque was credited to his
account. In March 2002 the cheque was debited to his account, as the cheque
was a fraudulent government cheque. It was established that the cheque
was originally lost in the clearing system. A few days after the cheque
was deposited, the bank received a message from the Reserve Bank, on which
the cheque was drawn, that the cheque was lost. It did not however debit
the complainant's account, as it should have. It only debited the complainant's
account when, in March 2002 it received another message that the cheque
was fraudulent. It was concluded that the bank made a representation that
the cheque had been honoured by not debiting the account in October 2001.
The bank eventually agreed to restore the account to the situation it
would have been had the cheque been honoured.
The complainant claimed an amount of R40 000-00 from the bank for unauthorized
cheques that had been written out by his wife, as she had no singing powers
on the account. The bank indicates that the complainant's wife had a general
power of attorney in respect of all of his accounts. Our office, however,
warned the complainant of a possible result of a successful claim against
the bank, being that the bank could possibly sue his wife for the R40
000-00 as she had the benefit of having bought goods with the cheques.
Despite various requests, the complainant never advised our office whether
we may proceed with the investigation into his matter. The file was therefore
The complainant, a school, had a savings account for the deposit of school
fees. The bank closed the account without giving prior notification of
the closure. The account was closed shortly before the school was to open
for the new school year and school fees had to be paid. Due to the closure
of the account, school fees could not be deposited and many parents did
not enroll their children, assuming that they had to enroll them elsewhere.
The complainant suffered a financial loss through the loss of fees. The
complainant provided proof that the number of pupils that enrolled that
year was dramatically lower than the two previous years. It could not
be established that the sole reason for this decline was the closure of
the account. It was, however, clear that the bank did not give notification
of the closure and an award was made for the distress and inconvenience
that the complainant suffered.
The complainant, a close corporation, had difficulty in preventing its
cheque account from going into overdraft. The bank warned it on several
occasions that it would close its account if this behaviour persisted.
However, the complainant continued to default and the bank decided to
close the account immediately. This decision was conveyed to the complainant.
However, the account was kept open for a while as cheques already issued
were being presented for payment. These were returned 'Refer to Drawer'
and the complainant's account was debited with the fees concerned. The
complainant alleged that insufficient notice had been given to it by the
bank of its intention to close its account and it claimed a refund of
the fees. This office advised the bank that reasonable notice should be
given to a customer whenever it decides to close an account, even though
the customer has been warned several times. The complaint was resolved
when the complainant agreed to accept an offer by the bank to refund half
of the fees charged to it.
Confidential statements on the complainant's account were obtained by
her estranged husband, despite her requesting the bank to refrain from
disseminating such information and its undertaking not to. The complainant's
husband refused to make a payment for school fees, because she had funds
in her account. The complainant claimed this amount from the bank, on
the basis that her husband would have paid had he not had knowledge of
her bank balances. The bank refuted the claim, stating that: There was
no guarantee that he would have paid in any event. · If she wanted
to deceive her husband, it could not be a party to that. · He could
have obtained a subpoena and had access to the records. · Since
they were married in community of property, there was a single estate
and he had a right to the information. We did not make an award for the
amount claimed, but recommended that the bank compensate the complainant
for the distress and inconvenience caused by their actions in contravention
of the Code. The account was not a joint account, nor was there a power
of attorney/authorisation in favour of the complainant's husband. The
bank had jumped the gun in providing information before it was subpoenaed
to do so.
A customer of a bank required short-term loan from his bank, but the bank
refused to grant it to him. The customer alleged that on previous such
occasions the bank had accommodated him and he expected the same treatment
as before. The bank had, however, adopted new methods of assessing risk
and it appeared that the customer no longer qualified in terms of its
new criteria. The customer submitted his complaint to this office, but
we decided that we could not intervene. The bank had made a commercial
decision and therefore the matter was beyond our jurisdiction. The customer
may or may not have merited the finance he needed, but this office considered
that it had no right to look into or comment on this.
Approximately three years after unsuccessfully applying for a gym membership,
the complainant received a letter from the bank informing him that he
owed it in respect of what it had paid to the gym. The complainant was
listed at a credit bureau. Our office focused the bank's attention on
the fact that the claim had prescribed and could no longer be collected.
The bank conceded this, wrote off the outstanding amount and de- listed
the complainant at the credit bureau.
A complainant lost her credit card. The thief used the card for purchases
far exceeding her card limit. Even though she was covered by lost card
protection, the bank refused to compensate her for her the fraudulent
purchases. The bank stated that she was negligent in not reporting her
card sooner. We held the view that she was not negligent considering her
past pattern of use. We further decided that she could not be held liable
for those purchases, which exceeded her card limit. The bank settled the
matter by compensating her for all the fraudulent purchases made.
The complainant's credit card was stolen from him and the thief made numerous
purchases with the card over the next few days before the card was retrieved.
Many of the purchases were charged back by the bank to the stores concerned
because the signatures on the vouchers did not match the specimen signature
on the card. However, certain vouchers could not be obtained for comparison
purposes. The bank refused to pay the balance of the loss on the basis
that the complainant was negligent in that he lost control of his card.
However, the bank finally agreed to reimburse the complainant in full
when it was put to it that - · the signatures on the missing vouchers
probably also did not match the specimen signature; · the card
holder's credit card limit was exceeded; · the customer was not
warned that purchases made with his card could cause his limit to be exceeded.
The complainant had a credit card and was telephoned by sales persons
representing her bank who tried to sell her financial products. The benefits
of the products were briefly explained to her and she was told that relevant
documentation would be sent to her to sign and return. The complainant's
card account was debited with debit orders being the costs of the products,
but she maintained that she neither received nor signed any documentation.
She therefore asserted that she should be refunded and submitted her claim
to us. As the bank could not produce any evidence that the complainant
had accepted the bank's offers it reimbursed the complainant in full.
The complainant, a local safari company, arranged a tour for an overseas
visitor. The visitor paid for the tour with his credit card, but the local
bank debited his card account twice. A refund was made, but due to a change
in the exchange rate, the visitor was short paid by £75. The complainant
claimed this amount on behalf of the visitor. However, the bank debited
his card account with the cost of the trip a third time. When this was
rectified, a further exchange loss of £72 was incurred. The bank
responded quickly by refunding the amount of £147 to the overseas
visitor and after negotiations it agreed to pay R500-00 to the complainant
for its costs in terms of time and telephone calls and inconvenience suffered.
This complaint relates to fraudulent transactions effected with the complainant's
credit card. The bank forwarded the credit card via post to the complainant
through the postal services. The complainant authorized a third party
to collect the card on her behalf, and to forward it via registered post
to her in New Zealand. The post office acts in their capacity as agent
on behalf of the bank. Once the complainant collects the card from the
post office, the risk passes to the complainant, and to this end the banks
urge customers not to re-send credit cards without contacting them. The
complainant had lost card protection, which protects customers against
the unauthorised use of a card, from the time of the loss of the card
until such loss is reported, with the exclusion of negligence on the part
of the customer. The bank stated that the complainant acted negligently,
constituting a breach of the conditions of use of credit cards, and is
therefore not covered by Lost Card Protection. Lost Card Protection covers
no PIN based transactions. None of the fraudulent transactions herein
are PIN based. The card has not been retrieved. The complainant did not
sign the card, as she has not received it. The criminal who obtained the
card would have signed it and it would not be evident that a fraud is
being perpetrated. Therefore the merchant cannot be held liable. We are
of the opinion that the bank was justified in refusing the complainant
Lost Card Protection on the basis of the complainant's negligence. The
complainant had a credit limit of R 5000-00. The bank has granted the
complainant a credit limit of R 6 300-00 for her convenience. The fact
that the bank has unilaterally increased the complainant's credit limit
has exposed the complainant to increased risk. The credit limit was exceeded
in that the majority of fraudulent transactions were under the floor limit
of the merchants and did not require the bank's authorization. The bank
authorized those transactions in excess of the floor limit, as credit
was available. The conditions of use of the bank's credit cards states
that a customer may not obtain cash or purchase goods which will cause
the credit limit to be exceeded, and further states that a customer is
liable for all transactions debited to the account, irrespective of whether
they were made by the customer, unless the card is reported lost or stolen.
The bank stated that it does not stipulate that the credit limit may not
be exceeded. The bank allows the operation of a system whereby purchases
can be made irrespective of whether or not the card is overdrawn. The
transaction, if under the floor limit, is authorized automatically. The
complainant is not informed of this risk associated with any credit card.
Any normal credit card holder will understandably be under the impression
that the credit card limit cannot be exceeded. He is never given any information
to the contrary. A cardholder is exposed to enormous risk without being
informed of the implications. If the bank does not want to inform the
client due to possible abuse, it must ensure that the system does not
allow transactions exceeding the limit. If the bank cannot change their
system it must either inform the client of the risk or it must accept
the liability for fraudulent transactions exceeding the card limit. The
complainant cannot be held responsible for the bank's lack of control
over their systems. We suggested that the matter should be settled on
the basis that the bank credit the complainant's account with the value
of all the fraudulent transactions in excess of the credit limit of R5
000-00, including interest and charges thereon. The complainant was therefore
held liable for any positive balance on her card at the time it was lost
/ stolen as well as the credit limit of R5 000-00. The bank was liable
for the value of all the other fraudulent transactions.
The complainant noticed a deposit on his credit card account. He enquired
the source of the deposit at the bank, but did not receive an explanation.
Due to the fact that he expected payment from clients he thought that
the amount reflected belonged to him. The bank debited the complainant's
account due to a mistake that it made in respect of the deposit - it belonged
to another client. The complainant had spent the money and therefore his
account was overdrawn with the debit-transaction. He requested the bank
to credit his account with the amount because he thought the money belonged
to him and therefore he had spent it, not hearing anything from the bank.
The complainant stated that the bank admitted their mistake and therefore
credited his account again. The bank acknowledged that they had made a
mistake and once again debited complainant's account. As token for the
inconvenience it has caused the complainant, it offered to extend his
credit facility, provide him with a budget facility, voyager miles and
to write of the interest and let the complainant repay the capital over
a 24 or 36-month period. This office concluded that the bank's actions
were justified. In doing so, it referred to the view expressed by the
New Zealand Banking Ombudsman that it is "not a good idea to have
an absolutely fabulous spending spree without absolute certainty about
the source of the funds".
A woman who claimed to have met her at the bank previously approached
the complainant. The woman claimed to be doing a promotion for a competition
at the bank's head office, and invited the complainant to participate.
She offered to assist the complainant to fill out the forms and asked
the complainant to write down all her details including her identity number
and credit card number, which the complainant duly did. The complainant
stated that she trusted that the person was indeed an employee of the
bank. The lady offered the complainant a credit card holder, and in the
process swapped the complainant's card with that belonging to someone
else. The complainant stated that she realised what had happened within
the hour and reported the incident to the bank, which stopped her card
immediately. The bank however informed her that an amount of R 1 000-00
was fraudulently withdrawn from her account. The bank states that the
complainant was approached by an unknown person in a shop, who requested
her to write down her personal identification number (PIN), address and
identity number, which the complainant supplied voluntarily. The bank
repudiated the claim as they are of the view that the complainant compromised
her PIN number to this unknown person in breach of the Code of Banking
Practice as well as the terms and conditions of use of the card. We investigated
the complaint and to this end enquired from the complainant whether she
voluntarily disclosed her PIN number to the third party pretending to
promote a competition. The complainant responded by stating that this
third party had in fact commented on the fact that her birthday is on
the 19th February. The complainant confirmed to this office that her PIN
number was in fact her birth date, and commented on how clever the third
party was in figuring that out. A transaction cannot be effected without
the correct card and PIN number. The complainant conceded that the third
party worked out what her PIN number was by referring to her birthday.
In our view, the complainant's conduct constituted negligence. Although
we sympathised with her loss, she was the victim of a criminal/con artist.
The bank could not be held liable for her loss.
The complainant was a member of a CC that exceeded the approved limit
of its overdraft facility on its cheque account. The complainant, having
been diagnosed with a serious illness, received payout into his personal
account of dread disease cover. The payment occurred on the same day that
he suffered what appeared to be a seizure and was admitted to hospital.
According to the bank they then received a telephone call from the complainant,
instructing them to pay off the overdraft of the CC. This was followed
by a written instruction. The Bank conceded that the signature on the
written instruction was not according to their specimen signature, but
was satisfied by another phone call they believed to have been from the
Complainant, confirming the instruction. The transfer was then made paying
off the CC's overdraft. The complainant denied that he phoned the bank
or issued the written instruction. He presented evidence that showed that
he was in hospital at the time and not medically fit to make any rational
decisions. It was found that the complainant could indeed not have been
in a condition to make the calls or issue the written instruction. It
was concluded that the bank did not follow proper banking practice. The
signature differed from the specimen signature and the only instruction
that the bank therefore had was telephonic. It was recommended that the
bank refund the amount transferred out of the Complainant's account together
All the complainant's problems with his accounts were resolved by the
bank except for his claim for compensation, which the bank rejected. The
complainant claimed an amount of R14 000-00 for his wasted time and effort
in getting the matter resolved. The complainant had initially been referred
from person to person within the bank without anyone properly assisting
him or investigating his complaints. This situation continued for an extended
period. On the facts it was clear that the complainant was subjected to
substantially more inconvenience and distress than one could reasonably
expect in trying to resolve a problem. It was recommended that the bank
pay R1 000-00 to the complainant for substantial distress and inconvenience
suffered. The bank accepted the adjudication and credited the complainant's
bond account accordingly.
Fees and charges
12 members of an organisation took out loans with the bank. The loan agreements
did not clearly disclose the fact that the loans incorporated substantial
charges for insurance and administrative costs. The employees were only
informed of these charges after the loans had been signed. A complaint
was lodged objecting to the hidden costs that were being levied. The bank
initially refused to entertain the claim. Later the bank met with representatives
of the organisation and an agreement in favour of the complainants was
The complainant arranged that the bank would only pay out funds from his
mother's account with him as co-signatory, to protect his mother's funds
from the "black sheep" brother who was living with his mother.
The bank erroneously allows the mother to withdraw all her funds with
only her signature, and place them into a new account in her name. The
black sheep then managed to persuade his mother to pay off his debts and
lend him the main portion of her life savings. We concluded that the bank
had breached its duty to ensure that funds could only be withdrawn with
two signatures. However, we also found that the bank's breach did not
cause the complainant or his mother any loss. The complainant and his
mother remained in the exact same financial position before and after
the breach by the bank. The loss was only suffered later due to the mother's
own actions. The complainant, after a lengthy exchange of correspondence,
accepted our Office's award for distress and inconvenience.
The complainant entered into an Instalment Sale Agreement with the bank
to finance a motor vehicle. Later, her broker requested her bank to get
confirmation signed by the complainant. The cover confirmation sent by
the broker was marked for the bank official's attention and indicated
in bold letters that the insurance would not be in force unless it was
signed by the complainant and faxed back to the broker. This was never
conveyed to the complainant, even though she visited the bank to sign
the Instalment Sale documents. She paid a deposit and the bank issued
a Release Note to her. Her vehicle was subsequently written off in an
accident and her insurance claim was repudiated. The issuing of a Release
Note by the Bank placed the complainant under the reasonable impression
that the vehicle was duly insured. The bank admitted liability, refunded
the deposit and wrote off the balance outstanding.
The complainant's husband passed away on 15 July 2001. He had just prior
to his death tried to take out a life policy. According to the complainant
the bank was negligent where they were in possession of the forms to be
signed by the complainant's husband in order to take out the policy, but
had not contacted him to sign it. It was found that the insurance company
had received the last medical report a day before the complainant's husband's
death. The report was received on a Friday and the complainant's husband
died on a Saturday. The bank had only received the further requirements
that included a 100% loading that the complainant's husband had to consent
to before the policy would be taken out. It was found that the delay in
obtaining the additional medical reports could not be blamed on the bank
and that the bank had indeed only received the further requirements on
the Monday. It could not be said that the complainant's husband would
indeed have signed the documentation and accepted the loading. The Bank
was not found to be negligent.
The complainant took out an income protector policy through a bank broker,
replacing an existing policy. The new policy had lower premiums but he
was informed that he had the same cover as he had on the original policy.
The complainant had a psychological ailment and could no longer work.
He claimed in terms of the policy. The claim was denied because the type
of condition was not covered by the policy. He said that he was not made
aware of this exclusion and that the broker therefore made a misrepresentation.
His original policy did not have such exclusion. It was found that the
claim was also denied because the condition could not be considered to
be totally disabling. The exclusion was however unusual, and it was found
that the broker did not point this difference out to the complainant.
An amount for distress and inconvenience suffered by the complainant was
recommended, but not accepted by him.
The complainant registered her bond during May 2000, and informed the
bond attorneys that she would be making use of her own insurance for the
property. Upon receipt of her first statement, she noticed a deduction
for insurance. With considerable difficulty, she established that the
bank had instituted its own policy also. The complainant then claimed
from the bank a refund of the premiums that it had deducted. We suggested
that the bank refund a considerable portion of the premiums to the complainant,
as timeous replies to the complainant's queries could have minimized her
The complainant wanted to use her own short-term insurer when she was
granted a bond. She was told that her insurer would need to be approved
by the bank; otherwise she would have to use the bank's insurer. The complainant
submitted the necessary information for her insurer to be approved. She
then received a letter from the bank indicating that its policy was in
force, but no reply about her insurer. The complainant thought this was
a mistake and did not enquire further. Later she noticed premiums for
the bank's insurance debited to her account. She started enquiring, but
received no explanation until the complaint was lodged with this office.
It was concluded that the bank's failure to inform the complainant that
her application had been declined was not good banking practice. It was
recommended that compensation be paid for the inconvenience she suffered
and that the bank refund the premiums she had to pay to her own insurer.
The complainant's husband took out a bond to purchase a house in 1991.
Life insurance cover was taken out. The insurance premium was deducted
annually from the bond and recovered along with the bond's monthly instalment.
The complainant's husband died in 2001. The insurance company refused
to settle the outstanding amount on the bond as it had cancelled the policy
in 1992 after only having received the first instalment and no others.
The bank admitted having failed to pay the premiums over to the insurance
company after deducing them. The bank claimed that in term of an agreement
with the insurance companies, it was their duty to request premiums from
the bank. We advised the bank that our pre-investigation view was that
it was liable. The bank responded by agreeing to settle the claim in full
A mediation that highlights the benefits of the process involved a long-term
insurance company, a bank and a complainant. The insurance company is
not subject to the OBS's jurisdiction, so its participation was on a voluntary,
contractual basis. The complainant had sold goods to a fraudster who had
managed to have the proceeds of an irregularly surrendered policy transferred
into a bank account opened specifically to receive the funds. The fraudster
then transferred these funds to the complainant's account held at the
same bank. When the insurance company became aware of the fraud, they
contacted the bank requesting that the funds be frozen. The funds were
indeed frozen in the hands of the complainant's account, resulting in
a cheque that he had drawn in favour of his supplier being returned unpaid.
Each party believed they were not responsible for the losses and each
party was initially not prepared to incur any liability, the insurance
company expecting to have the funds returned, the bank happy to comply
with a binding instruction in regard to whom they should give the funds
to and the complainant insisting the bank unfreeze the account and pay
damages and interest. The matter was settled amongst the parties on the
basis that the bank refunds the insurance company a portion of the funds
and also unfreezes the full amount of the funds available in the complainant's
account. The result in the end was that each party, to varying degrees,
compromised on their original position.
on student loan
The complainant took out a student loan from the bank and, whilst she
did repay the interest during her first year of study, it was agreed that
she would be able to begin repayment of both the remaining interest and
capital upon completion of her degree. The complainant made numerous monthly
repayments once she graduated and in fact these payments totalled more
than double the amount of capital she borrowed from the bank. According
to the bank statements, the complainant still owed the bank a considerable
amount of money, which led the complainant to seek the assistance of the
office, claiming that the in duplum rule applied to her and that, accordingly,
she was only liable for up to double the capital originally borrowed from
the bank. The office conducted fairly extensive research into the history
and nature of the in duplum rule that dates back to Roman Law times, and
determined that it applies only to still unpaid interest and not to interest
already paid. It was ruled that the bank was entitled to apportion the
complainant's payments first to interest and then to capital. By doing
so, the amount claimed by the bank was legitimate, despite the fact that
it would mean that the complainant had repaid more than double what she
borrowed from the bank originally since the interest that was in question
was paid interest and therefore the in duplum rule did not apply to it.
It must be mentioned that despite the ruling in its favour, the bank in
question reached an amicable settlement with the complainant and wrote
off a substantial amount of the outstanding debt.
The Complainant made an investment through a broker of the bank. He wanted
his capital to be guaranteed and wanted to receive a monthly income. He
later realised that the product he obtained is not what he agreed to.
He queried this and also instructed that his monthly income be reduced
in order to ensure that the capital grows to his original investment.
When he gave this instruction the investment was passed on to an independent
broker. The complainant said that he never gave this instruction. The
bank initially denied liability on the grounds that the broker, that handled
the matter, does not belong to the bank. It was pointed out to the bank
that the complaint was precisely that the fact that the matter landed
up with the independent broker was contrary to the complainant's instructions.
The bank revisited the matter and decided to pay the complainant and amount
of R385 000.00.
The complainant invested R400 000,00 in Unit trusts on the advice of the
bank's financial consultant. She submits that as the consultant did not
advise her of any alternatives, she assumed that there were no other products
appropriate to her requirements. The consultant failed to explain to the
complainant that Unit trusts were linked to the stock market: she discovered
this 6 months later. She however, left her funds in the said investment.
Three years later, the total investment has dwindled to approximately
half its original value. Her complaint is that she tried on several occasions
during that time to contact the consultant for his advises regarding the
steady decline in her investment value and he either did not return her
calls or he failed to revert with the promised action plan. We found that
the consultant was negligent in that he failed to inform and advise the
complainant of her options properly after the stock market crash, and
also that the complainant had failed to adequately mitigate her losses.
We recommended that the consultant return half his initial fee to the
In another matter the complainant's instructions regarding an investment
were that the capital invested be guaranteed, and that he required the
maximum monthly income from the investment during the period of the investment.
The complainant further indicates that he was not aware that his money
would be placed in unit trusts and subject to market volatility. The complainant
had lost approximately R17 000 from his initial investment and expected
the bank to reimburse him with that amount. The policy documentation clearly
indicates that the product was linked to unit trusts and subject to market
volatility. The guaranteed maturity value was clearly indicated as an
amount lower than the capital amount invested. The bank, in an attempt
to settle the matter, offered an amount of R10 000 as an ex gratia payment,
which the complainant rejected. The documentation does not appear to be
ambiguous, and there is a dispute of fact between the bank's version of
what took place on the day the investment was made, and that of the complainant.
We wrote to the complainant urging him to reconsider the bank's offer,
as, in the circumstances, it appeared to be very reasonable.
Complainant sought investment advice from his bank's financial consultant
as he had R269 000,00 to invest. He had an idea of buying a second home,
as his home was bond free. The consultant advised him to rather apply
for a bond on the house that he was occupying and to invest the amount
of R150 000 in unit trusts. On expressing his concern about the repayments
on the bond, the complainant was advised by the consultant that he would
get R1 500-00 from the investment and that this would service the bond.
The complainant was a pensioner who was not made aware of the risks involved.
We held that the consultant failed to provide the complainant with sound
advice and also failed to recommend alternatives once the capital had
decreased drastically. A fact that could not be ignored is that, what
appeared to have been an unencumbered asset was as a result of having
followed the consultant's advise, now burdened with a mortgage bond. We
thus held that the consultant had misrepresented the dynamics of the investment
to the complainant and that this had ultimately misled him. We suggested
a settlement of R20 000,00, which the parties accepted.
The complainant and her former husband (Mr A) opened fixed deposits in
the names of their three minor children. The complainant and Mr A signed
the application forms to open the accounts. On maturity the proceeds were
paid out to Mr A on his instruction only. According to the bank he was
the only signatory to the account. Mr A did not give the money to the
complainant or the children and he did not apply the money for the benefit
of the children. The documentation submitted to us office showed that
the complainant's signature had been obliterated on all the applications.
It could not be established who made the alterations or when they were
made. It was however concluded that it was not good banking practice for
the bank to open or maintain the accounts with the alterations on the
forms. The suggestion that the bank make an ex gratia payment was accepted
by both the bank and the complainant accepted.
The complainant was the sole member of a close corporation (CC). She complained
that several amounts were transferred from her personal account to her
CC account without her authority. The transfers were authorised by her
bookkeeper, by telephone. The complainant denied having given the bookkeeper
authority to transfer funds from her personal account. The bookkeeper
was involved in defrauding the CC. The CC was eventually forced into liquidation.
The bank contended that the complainant had given the consent verbally
at a meeting. In any event, the complainant would be unjustly enriched
if she were reimbursed, as she and the CC was the same person. It was
held that the bank had failed to produce credible evidence that the bookkeeper
was properly mandated to transfer funds from the complainant's personal
account. It would be contrary to good banking practice, let alone sound
business practice, in the age of fax machines and e-mails, for a verbal,
open mandate to have been obtained in the manner suggested by the bank.
In terms of the Close Corporations Act, a close corporation is a separate
juristic entity from its member(s) and has limited liability. Accordingly,
the bank's argument in this regard failed. The bank was ordered to reimburse
the complainant the full amount that had been transferred from her account.
The complainants wanted to obtain a further bond for R70 000.00 on their
property to finance a business deal and received confirmation that this
amount was granted. When the attorneys phoned them to sign the documents
they were however informed that the bond was only in the amount of R12
000.00. As the complainants had already committed themselves financially
they had to sell their house to cover their commitments. After lodging
a complaint they were informed that a mistake had been made and that they
did indeed qualify for a bond of R70 000.00. The bank paid an amount for
distress and inconvenience and for occupational rental that the complainants
had to pay on a new property.
The complainant qualified for a bond, and alleged that the bank's attorneys
informed her that she might organise her own homeowners' assurance. The
complainant noticed a deduction for insurance from her first bond statement,
and for a period of nine months battled to obtain details from the bank.
The bank after nine months confirmed that the deduction is for homeowners
insurance, and that the complainant was obliged to make use of the bank's
insurers in terms of her loan agreement. Our office took note of the fact
that the bank's insurers had to be used in terms of the loan agreement.
The complainant however paid double insurance due to the bank not informing
her, of the nature of the deduction. The bank accepted a recommendation
in which the bank had to reimburse the complainant with a percentage of
the double premiums that complainant had to pay.
The complainant's instalments on her bond account were paid directly by
her employer. Her employer would send cheques as payment for all its employees'
instalments. According to the complainant, the bank would in some instances
only credit her account some days after the cheque had been received.
Consequently she suffered damages as she was paying interest on a higher
balance. It was found that in some instances there was indeed such a delay.
After enquiring with other banks as to the industry practice it was concluded
that the bank should have regarded the day that the cheque was banked
as the effective date of payment. The instalments should in all instances
have been credited to the complainant's account on the same day as the
cheque from her employer was banked. A precise quantification of the complainant's
loss could not be made and it was recommended that bank pay an amount
of R1 000-00. The complainant however refused to accept this.
The complainants had two bonds over their property. They claimed a refund
in interest from bank because a fixed interest rate and not a variable
rate should have been applicable to both bonds. The documentation for
the first bond showed that a variable interest rate was applicable. There
were, however, contradictory terms regarding the interest rate in the
second bond contract. One clause indicated a fixed rate, while another
clause mentioned a variable rate. The complainants had however been charged
interest at a variable rate for about seven years before they complained.
The bank indicated that it was entitled to rectification of the contract,
as the written document did not reflect the true intention of the parties.
It was concluded that bank was indeed entitled to rectification. The fact
that a variable rate had been applied to the bond for around seven years
showed that the true intention of the parties was that a variable rate
The complainant was being held liable for a substantial outstanding amount
on his bond account. An Initial Assessment found that, in contravention
of the in duplum rule, the amount that the bank was claiming was indeed
more than what it was entitled to claim and suggested that the bank write
off a substantial amount on the account. The bank eventually wrote off
the whole amount that the complainant still owed on the bond.
The complainant alleges that she did not make an over the counter withdrawal,
and claims the amount of R2 000 from the bank. The bank furnishes us with
a statement from the teller that indicates that she obtained the person
making the withdrawals ID. She confirmed that the picture on the ID matched
with the person making the withdrawal, and that the ID number corresponded
with the ID number on the bank's system. The statement of the teller was
corroborated by details captured on the deposit slip. Our office was satisfied
that the bank had taken the necessary steps to identify the person making
the withdrawal before making payment.
The complainant purchased a motor vehicle on hire purchase and immediately
authorised a debit order to service the insurance on the vehicle. Due
to an administrative error the monthly premiums were never debited to
his account, resulting in no insurance cover coming into effect. When
the complainant's son was involved in an accident the claim was repudiated
on the basis that the vehicle was not covered. The bank approached the
insurance company to accept late payment and entertain the claim. The
insurance company submitted that even if the complainant were covered,
they would still have repudiated the claim on the basis of non-disclosure
of the fact that his son was a regular driver of the vehicle. We pointed
out that as the bank's error resulted in no policy coming into existence,
nothing was forwarded to the complainant. Accordingly, he was denied the
opportunity to disclose that fact to the insurance company. The bank accepted
The complainant submitted that a deposit to the bank for rentals was incorrectly
recorded by the bank. He contended that he deposited R1454-20 and that
the bank teller only processed an amount of R54-20. He maintained that
his deposit slip reflected the correct amount. The bank's records reflected
an amount of R54-20 as having been deposited. We called for the original
documents in order to facilitate a decision in the matter. On the face
of it, it appeared that the complainant's deposit slip was not tampered
with, as it appeared that it was the same handwriting and that the same
pen was used to fill in the amount. Nevertheless, in order to be certain
of our recommendation, if any, we procured the services of a forensic
expert. His report revealed that the complainant's original documents
were in fact tampered with. The tampering was detected by the delay in
the insertion of the numbers 1 and 4 after the R denoting the Rand and
before the 5. We therefore closed our file due to a lack of merit to the
complaint. This matter is a prime example of how unscrupulous behaviour
on the part of the complainant not only wastes the time and resources
of this Office but also prejudices the chances of other legitimate complainants
being dealt with faster.
The complainant had been issued with a petrol card, but when he resigned
from the firm where he was using it for petrol purchases, he left the
card with the firm for it to pay off the amount he still owed on it. However,
the card was used to pay for further purchases and the complainant maintained
that he was not liable for them. However, bank statements were sent to
him showing these purchases, but he did not object to them at the time.
In our view, by doing so, he condoned the actions of the purchasers. Furthermore,
he contravened the bank's terms and conditions by losing control of the
card. In order to recover part of the debt the bank exercised its right
of set-off to which the complainant also objected. We advised the complainant
that we could not see any reasonable prospects for an adjudication in
his favour and closed our file.
The complainant had his garage card stolen. He had not used the card for
a long time so he did not realise it was stolen. He was then informed
that R19 000.00 had been spent on the card. The account had been dormant
for a long time. The account did not have any overdraft facilities. He
accuses the bank of having been negligent in not alerting him to the activity
on the card. A meeting was arranged between the bank and comp. A settlement
was reached: the complainant accepts liability for the credit balance
of R10 000 that was on the account and for a shadow credit limit of R2000.00
(of which he was aware based on his knowledge of how it worked on his
other accounts). The bank then accepts liability for all the transactions
that took place beyond the shadow limit (about R8000).
The complainant bought a property from the bank's Property in Possession
(PIP) department. A year and a half after the property was registered
in his name; the complainant had not been able to occupy the property,
as an illegal tenant refused to vacate it. The bank had not even handed
the complainant a key to the property, despite the fact that the complainant
was making regular monthly payments towards his bond. The complainant
requested the reversal of the transaction, as the town council was now
threatening to sue him for arrears. The bank offered to take steps to
assist the complainant in having the tenant evicted, although its contract
did not guarantee vacant possession. Our Initial Assessment suggested
that the transaction be cancelled and the complainant be put into the
position had the contract not been signed. Following discussions, the
bank undertook, in future, to assist clients in obtaining vacant possession
of properties sold. In the event of the eviction not be finalized within
the timeframe stipulated, consideration would be given to cancellation
of the contract. The bank further agreed to add a new addendum to its
standard form contract, specifically making clients aware of the risks
involved in purchasing a PIP.
The complainant bought one of two units in a sectional title complex.
The transfer for both units was done on the same date. When the complainant
wanted to sell his unit, he found out that his unit was on the name of
the owner of the other unit and vice versa. He felt that the bank should
have seen to it that the right property was bonded. The office could not
impute any liability to the bank, as there were other parties involved
in the transfer. The bank however, without accepting liability, offered
to pay for the rectification transfer in order to place the complainant
in the position to transfer the correct property.
The complainant bought a property owned by the bank and also obtained
her financing through the bank. The description that the bank gave the
complainant showed that the property was a two-bedroom place. The complainant
went to view the property several times, but could not gain entry. Everything
was however ready for the transfer and the complainant allowed the transfer
to go through, still not having viewed the property. Even while the transfer
process was going on, she still attempted several times to gain access
to the property without success. After the transfer went through, the
complainant found that the property was a one-bedroom unit and not a two-bedroom
and found that someone was already in the property claiming to have a
rental contract with the bank. The bank paid the costs to evict the occupiers
of the property and also re-valued the property and found that the complainant
paid R45 000.00 too much for the property.
The complainant drew money from a bank branch. He was robbed of his money
when he arrived at his office. He suspected bank staff was involved in
the robbery in that they could inform robbers that he had withdrawn money
and what his address was. The bank investigated the incident and found
no staff involvement. It was found that our office was not equipped to
deal with this form of complaint. The level of investigation required
made it more appropriate for the police to investigate.
The complainant opened a savings account, ostensibly for use by his son.
As this was a "junior" savings account, no service fees were
charged. The bank became suspicious when large amounts were deposited
and withdrawn. It changed the portfolio to a normal savings account and
levied fees and charges for the past transactions. The bank did not inform
the complainant timeously and therefore refunded him 50% of the amount
that was debited against the account. The complainant claimed the rest
of the money. The bank has refunded the complainant 100% of the fees and
charges debited (the remaining 50%). The bank must inform its clients
timeously of any action they intend to take on an account. It may also
not act punitively without following legal channels.
The complainant applied for a personal loan with the bank and presented
an endowment policy as security. The loan was to be repaid on or before
1 October 1999. The bank wrongly surrendered the policy on 13 July 1999.
During the course of the investigation, it was discovered that the Bank
had acknowledged its fault in writing to the insurance company involved
on 18 October 1999. This was brought to its attention and the matter was
finally settled some 2 years after being accepted as a legitimate complaint.
The matter could have been resolved a year earlier had the bank co-operated
with the investigation and disclosed the relevant information.
The complainant was a member of a CC that exceeded the approved limit
of its overdraft facility. The complainant, having been diagnosed with
a serious illness, received payout into his personal account of dread
disease cover. The payment occurred on the same day that he suffered what
appeared to be a seizure and was admitted to hospital. According to the
bank, it then received a telephone call from the complainant, instructing
it to pay off the overdraft of the CC. This was followed by a written
instruction. The bank conceded that the signature on the written instruction
was not according to their specimen signature, but was satisfied by another
phone call they believed to have been from the complainant, confirming
the instruction. The transfer was then made, paying off the CC's overdraft.
The complainant denied that he phoned the bank or issued the written instruction.
He presented evidence that showed that he was in hospital at the time
and not medically fit to make any rational decisions. It was found that
the complainant could not have been in a condition to make the calls or
issue the written instruction. It was concluded that the bank did not
follow proper banking practice. The signature differed from the specimen
signature and the only instruction that the bank therefore had was telephonic.
The bank refunded the amount transferred out of the complainant's account,
After having sold his share of a close corporation (CC) the complainant
discovered that the bank had cashed in certain policies held by it as
security and used the proceeds to cover the debts of the CC. The complainant
claimed compensation based on the amounts assured and the projected value
of the investments involved. The bank conceded that the complainant had
been discharged as a surety for the CC and that the policies belonged
to the complainant. The bank argued that, as it held the policies as security
for the complainant's personal account that was in arrears, it was entitled
to realise them anyway. The office established that the legal position
is that, where a policy is pledged, due diligence must be exercised in
the custody of it. It may not be transferred until the debt falls due,
which happens when formal demand for repayment is made. The office held
that the bank wrongly applied the proceeds of the policies to the reduction
of the debts of the CC. The bank was ordered to arrange the reinstatement
or replacement of the policies, subject to the complainant providing certain
guarantees in respect of his indebtedness to the bank. Unfortunately,
the complainant had failed to disclose that he had had a heart attack
since the policies were cashed in, making it difficult to comply with
the ruling. The matter was eventually settled on the basis that the bank
paid the complainant a lump sum.
The complainant was advised by a broker to surrender policies he had that
were ceded to the bank as security, and to invest in unit trusts and take
out a new policy to cede to the bank. The complainant decided against
the broker's advice. He later found out that, without his knowledge or
consent, the cession was cancelled and that the policies had been ceded
to someone else. The complainant disputed that he had authorized the cession
and claimed that the bank had handed the broker the policies without his
authority, allowing the broker to commit the fraud. It was concluded that
the bank was negligent in canceling the cessions and handing the policies
to the broker. It was recommended that bank assist the complainant to
have the fraudulent cession cancelled. If this were not possible, it was
recommended that the bank replace the policies. An amount for the distress
and inconvenience the complainant suffered was recommended as well.
The complainant ceded unit trusts to the bank as security. She held the
bank responsible for the management of them during the period they were
ceded to the bank. This Office was of the view that the management of
an investment remains the responsibility of the "owner" of the
investment and therefore dismissed the complaint.
Complainant signed an unlimited surety for her son in 1992. The son paid
the debt in full. The bank sent a letter to the complainant releasing
the fixed deposit, which had been held in surety. In 1998 the son again
incurred debt on another loan with the same bank but failed to pay it
all. The complainant and her son were never informed that the original
surety signed in 1992 was still applicable and enforceable. The bank could
not recover the debt from the son so the bank sued complainant based on
surety for the original debt in 1992. We recommended that the bank withdraw
their action against the complainant based on the fact that the original
surety had possibly been cancelled. The bank resolved the matter by withdrawing
the action against the complainant.
The complainant's divorce order compelled her to have her ex husband released
as surety over their mortgage bond on or before the end of July 2000,
failing which she would have to pay him R190 000. She lodged her application
to release him 17 days before the due date. She complained that the consultant
represented to her that it would take 4 days to process and that she relied
upon that representation. The application in fact took 15 working days
to approve resulting in her being liable for the R190 000 payment to her
ex husband. We ruled that the bank was not a party to the settlement agreement
and could therefore not be held responsible for ensuring the complainant's
timeous compliance therewith. The bank was further not informed of the
urgency of the matter. The complaint was not upheld.
This office sifted through voluminous correspondence from the complainant
and the bank attempting to ascertain why an amount was transferred from
the complainant's one account to another with apparently no reason. Neither
the bank nor the complainant was able to enlighten us during our investigation,
and we therefore proceeded to compile an assessment, concluding that the
transfer was effected without an instruction. The bank's response to the
assessment included an application for rescission of judgment that had
been launched by the complainant. This application rather succinctly set
out that the transfer had been in terms of a debit order signed by the
complainant, which they requested the bank to reverse as they had made
direct cash payments. The complainant was therefore at all times aware
of the reason for the transfer, but omitted, even after the initial assessment,
to inform this office of the exact facts of the matter. The file was closed
based on the complainant attempting to mislead this office.
The complaint involved the bank having a vehicle "written off or
scrapped" in error. The complainant was the seller of the vehicle
and the bank customer was the would-be purchaser of the vehicle. The bank,
in its application to deregister the vehicle mistakenly applied for the
vehicle to be scrapped. The complainant claimed for the damages occasioned
by the subsequent cancellation of the sale agreement and distress and
inconvenience. We identified our lack of jurisdiction to investigate the
matter in step 3 of our process, as there was no bank/customer relationship
between the complainant and the bank. The bank was however, prepared to
make an offer of settlement to the complainant after we had brought it
to their attention firstly, that we lacked the necessary jurisdiction
to intervene and secondly that it appeared on the face of it that they
had made a fatal error that had in fact contributed to some, if not all
of the complainant's loss. The bank thus made an offer for distress and
inconvenience. It was interesting and indeed encouraging to note that
the bank in this instance was prepared to negotiate a settlement with
this office even though we it was outside of our jurisdiction. The complainant
was however not satisfied with the offer and preferred to pursue the matter
in court. He was nevertheless very happy with the service provided by
this office and understood and appreciated our limitations.
The complainant made a deposit of funds intended for his account. The
funds were incorrectly deposited into an account with a number that differed
by one digit from the complainant's account number. The complainant noticed
the error and immediately approached the bank. The complainant argued
that the bank was grossly negligent in not verifying the account name
and number, even more so in light of the fact that a bank employee wrote
the account number on a card for the complainant when the account was
opened. The bank countered that it is the responsibility of the person
making the deposit to complete the deposit slip and to ensure that all
the information reflected on the deposit slip is correct. The bank further
relied on the disclaimer clause printed on the deposit slip. The bank
indicates that the incorrect account, into which complainants' deposits
were made, has been closed, and the bank advised complainant that his
right of recourse lies with the person who has been unjustly enriched.
We investigated the matter and concluded that it was clear that the teller
was in direct breach of the provisions of the Teller Procedure Manual,
which clearly requires the teller to verify the cash, account number and
client's name, to the deposit slip. We suggested that the bank bore 100%
of the complainant's loss. Further, the bank was urged to pay an amount
in respect of distress and inconvenience, particularly as this matter
could easily and speedily have been resolved by the bank, without this
office becoming involved.