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Litigation: Bank rebuked for targeting client over scam loss

In a scathing judgment, Northwest High Court (Mahikeng), Judge Andre Petersen has thrown out FNB’s bid to hold an unemployed Vryburg man, Godfrey Kgethile, responsible for its losses – plus interest – amounting to R2.9m lost to a scammer who had persuaded Kgethile to reveal his bank details after telling him he had won a lottery. The ruling finally ended a six-year ordeal for Kgethile, notes a Sunday Times report. Petersen's judgment read: ‘The bank explained its computer software, which normally blocks unlawful payments being processed, experienced a failure ... from 18 October to 21 October 2015. The bank downplays it as simply being an error. The bank's computer systems being down ... cannot be relegated to being a mere error. It is clear the so-called error points to a compromised computer system where all of the bank's clients appear to have been at risk.’

The judge said though Kgethile should not have given his banking and personal details to a stranger, ‘the finding that (he) was in fact negligent ... cannot justify a finding that this negligence summarily entitles the bank to damages’. FNB's attorney Lue Kannieappan said the bank would study the judgment. Kgethile's legal aid lawyer, Sebastian Moses, said that FNB had never explained why it had transferred the money from Kgethile's account, especially as the account was dormant at the time. Banking services ombud Reana Steyn said what happened was ‘highly unusual, especially given the amount and that the account was dormant. This is the first (case) of its kind that we have heard of.’ She said when clients were defrauded it was not usually the bank's fault. ‘However, it is what banks do afterwards to help the client and whether they act quickly to improve or fix broken systems that matters.’

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