Unhappy banking clients have instituted legal action against the banking ombudsman and a number of South African banks due to the manner in which they handle Internet fraud cases, according to a report by the Rapport.
20 Absa and Standard Bank clients, who have each lost between R1 million-R2 million to Internet banking or SIM swap fraud, want the banks to be held accountable for fraudulent action.
The ombudsman meanwhile, will not open a case of fraud against a bank unless clients can prove that the bank’s acted negligently. If no negligence can be proven by the bank, it unfortunately means that the complainant is negligent.
In 2016, only 22% of cases of Internet fraud in South Africa was ruled in favour of the customer, while the remaining 940 cases of Internet banking-related complaints went in favour of the banks.
According to the report, the banks and the ombudsman argue that where a PIN or a password is fraudulently obtained, the client must be responsible as they are the only persons privy to that information.
However the 20 clients claim they never acted negligently nor did they give out personal information that could have compromised their accounts. They also argued that they have no way of proving a breach took place through the banks or via a cellular provider meaning it was next to impossible to prove who was at at fault.
They pointed to a recent case in which one of the 20 customers instituting the action had to take both Absa and Vodacom to court in order to determine who authorised a SIM swap on her cell number and therefore had access to her Absa bank account.
It was only after the court ruled in her favour and ordered that the client be given access to the records and was able to build a case that she was not liable for the fraud, said the report.