The complainant received a payment from an overseas Bank. Subsequently, the overseas Bank sent a recall request to the South African Bank and advised that an erroneous payment had been made into the complainant’s account. The overseas Bank paid an incorrect amount and then requested that the South African Bank reverse the excess amount that it had paid.
It was clear in this instance that this was a contractual dispute between the parties (the complainant and the overseas Bank). The complainant advised that her online trading account was hacked overseas and as a result there was an amount due to her. The complainant was alerted to the erroneous payment. She advised the overseas Bank that she was prepared to enter into a repayment arrangement for any amounts that she ascertained were paid in excess. It was clear that there was a dispute in respect of the amount payable between the two contracting parties.
After receiving the funds from the overseas Bank, the complainant transferred an amount to her sister’s account held with a Bank in Eswatini and used a portion of the funds to settle her loan account held with the same Bank in Eswatini.
The South African Bank, however, and without any mandate to do so, froze the complainant’s account and reversed the amounts that were paid into the complainant’s sister’s account and to her loan account. These amounts were then paid to the overseas Bank. The Bank in question relied on its terms and conditions to justify its actions.
The complainant lodged a dispute with our Office on the basis that this was a contractual dispute between her and the overseas Bank and that it was unclear on what authority the South African Bank froze her accounts and returned the funds to the overseas Bank.
Our investigation concluded that no fraud was alleged or reported to the Bank in this instance. The overseas Bank actioned a recall request and confirmed that it was not fraud.
The terms and conditions that the Bank relied upon were appliable to a scenario where there was a fraud allegation. The Bank acted outside its mandate and involved itself in a contractual dispute. We recommended that the Bank reimburse the amounts recovered without authority. The Bank agreed with our recommendation and returned the sum of R 342 000.00 to the complainant.
PRINCIPLE: The Bank is not a court of law and cannot debit and credit a customer’s account purely on the basis that it has the means to do so. A Bank is a creature of mandate and it must ensure that it acts within this mandate at all times when dealing with a customer’s account.
