Failure to follow mandate can be costly
The Complainant came to South Africa from Australia to sell his property and transfer the proceeds to his account in Australia. The Bank’s failure to advise the Complainant that it required an indemnity resulted in a delay in the proceeds from the sale of his property being paid to the Complainant’s account in Australia. Due to fluctuations in the exchange rate, the Complainant lost an amount of approximately A$40 343.
The Bank responded to the Complaint and offered to pay the Complainant the amount of R50 000 as a gesture of goodwill. The Complainant rejected the Bank’s offer.
Upon perusal of the documents and information provided to us by the Complainant and the Bank, it appeared that the Bank was always aware that the Complainant wanted the proceeds of the sale of the property to be transferred to his account in Australia and failed to advise the Complainant of all the requirements for the funds to be transferred.
It also appeared that the Complainant acted reasonably and diligently, taking proactive steps to ascertain from the Bank what documentation was required in order for the funds to be transferred to his Australian bank account.
The Bank only advised the Complainant that an indemnity was required at a late stage and after the Complainant had returned to Australia. This was despite the Bank being fully aware that the funds would need to be transferred to Australia from the inception of the transaction. The Bank also had ample time within which to request the indemnity from the Complainant and failed to take advantage of multiple opportunities to do this.
The delay in the funds being transferred to the Complainant’s account accordingly appeared to be directly attributable to the Bank’s conduct and failure to advise the Complainant correctly.
The Complainant’s claim was quantifiable as the historical exchange rates were available and this office recommended that the Bank refund the Complainant the difference in the funds the Complainant would have received and the funds he actually received. The Bank accordingly revised its offer and offered the Complainant the amount of R355 000 as compensation for the loss which he had suffered.
PRINCIPLE: The Banker/customer relationship is one of mandate. In instances where a Bank fails to act in accordance with the mandate given, it will be held liable for losses suffered.
