WENDY KNOWLER | Bank on returns, but only if you’re quick off the mark

You like to have instant access to your money, right? 

Sadly, criminals want that too.  

And they get it, in many cases, having tricked their victims into divulging their passwords and pins after targeting them in phishing or vishing attacks.

Those odd words refer to the act of fraudsters contacting bank clients via email or phone and pretending to be employees of their bank’s fraud division. Bitter irony.

Banks repeatedly warn their clients, on multiple platforms, never to divulge those numbers, the so-called “the keys to their safe”, to anyone, and that if they do suffer losses after doing so, they will not be reimbursed. 

But what if you’re hijacked or the victim of a home invasion, and forced to reveal those numbers or present your face to open your phone and banking app at gunpoint?

Can the bank still refuse to reimburse your losses?

I put that question to Ombudsman for Banking Services (OBS) Reana Steyn, sharing a couple of such cases reported to me in the past week. 

Thembinkosi Kitshini he was hijacked a month ago at a stop street in Midrand while driving home from a dinner.

When an SUV pulled up in front of him and four armed emerged and rushed towards him, he assumed they wanted his car.

Instead, they bundled him into its boot, drove him to a deserted area, forced him to his knees at gunpoint, beat him and then used his phone’s facial recognition tech to unlock the phone and his banking apps.

Having emptied all his accounts, they drove him back to the highway, opened the boot and let him go.

He drove straight to Midrand SAPS to open a case of theft.

The criminals subsequently got their hands on R3,000 from his FNB account, which has since been reimbursed by the bank.

Sadly, that wasn’t the end of it.

Another R84,000 was transferred out of his Capitec account into the fraudsters’ — or more likely, that of a paid money mule — Capitec account and several Bidvest accounts.

Capitec has told him his loss stands at R20,000 and it’s working with Bidvest to recover as much of those funds as possible.

Steyn said the OBS's starting point when dealing with such complaints is that a bank customer is liable for all transactions that take place with the use of their confidential access banking details.

Unfortunately, though we truly sympathise with the victims of these incidents and understand they are not to be blamed for the crime, we also understand that banks cannot be blamed for the crime or losses as the kidnapping and robbery took place outside of the bank premises.

—  Reana Steyn, banking ombudsman

“Liability only shifts to the bank once the compromise of these details has been reported to the bank, because only then will the bank be expected to take immediate steps to prevent the customer’s losses,” she said.

That’s why it’s so important to report incidents of fraud or theft to your bank immediately, because all losses from the time of that phone call — the second the call connects — must be reimbursed by the bank.

“Unfortunately, though we truly sympathise with the victims of these incidents and understand they are not to be blamed for the crime, we also understand that banks cannot be blamed for the crime or losses as the kidnapping and robbery took place outside the bank premises,” said Steyn.

To compel banks to refund victims who’d given gun-toting criminals access to their accounts would “place all the banks at risk of banking customers pretending to have fallen victim to a crime”, she added.

“And this will lead to an untenable situation which could threaten the collapse of the banking system.”

However, some banks do refund victims of such crimes, she said.

“And we often advocate for this outcome on a sympathy basis as well.”

The ombud said while many consumers assumed banks had insurance to cover such losses, this was not the case.

“Banks cannot take out insurance against these types of incidents due to the indeterminate liability that comes with them,” she said.

But Steyn is of the view the banks could help mitigate consumers’ losses.

She’s planning to engage with them with the suggestion that they allow clients to protect their accounts by issuing instructions to prevent immediate access to their funds, such as a seven-day notice period to withdraw monies from investment and home loan accounts.

That would go a long way in preventing the rapid transfer of massive sums of money out of victims’ accounts. 

And it’s something we as bank clients should engage with our banks about too. If we don’t need immediate access to our non-transactional accounts, why allow that to the fraudsters?

Meanwhile, I asked Capitec if it would consider reimbursing Kitshini his losses — in full or part.

“We acknowledge and sympathise with the client’s experience,” a spokesperson said. 

“As soon as the issue was raised with Capitec, the account was stopped and it was addressed immediately with the corresponding banks. 

“We align with the OBS’s position, but we are actively working with the receiving bank to recover as much of the money as possible.”

So no commitment yet.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.