FNB Fails to Recover R2.9 Million from Client Who Was a Victim of Internet Scam, High Court Dismisses Lawsuit

• The First National Bank's attempt to retrieve almost R3 million from a client who was scammed on the internet has been dismissed
• The victim had received a scam message that he won a large jackpot and was asked for his personal details by the scammers, which he unwisely gave them
• Months after the incident, FNB noticed a fraudulent transaction had taken place and contacted the victim to cover a R2.9 million transaction on his account

NORTH WEST - The First National Bank's lawsuit against a client who fell prey to an internet hoax, which cost the bank R2.9 million, has been dismissed by the North West High Court.

The incident took place in 2015 when Godfrey Kgethile, who was unemployed at the time, fell victim to a scam while at an internet shop in Vryburg, North West, reports Fin24.

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Kgethile is said to have been using one of the computers in the shop looking for employment when a pop-up advert told him he was the lucky winner of a large sum of money. He was then asked to enter his details in order to receive his lottery winnings.

Soon after giving away his banking information and ID number, he was contacted by a woman, whom he says sounded British. She asked for his proof of residence, which he handed over.

Kgethile then went to the bank to see if the funds had been deposited into his account. However, he was told that they hadn't been and he had to deposit R50 to access the account. He then deposited the money as instructed.

Around 10 months after the incident, an FNB employee contacted Kgethile and told him he needed to pay back R2.9 million that had been transferred from his account over a two day period to a third party, according to MyBroadband.

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Kgethile's lack of liability for the money lost was on the basis that his bank account only had a withdrawal limit of R5 000. Aside from that, he never had the R2.9 million to begin with

His legal representative argued that Kghetile's bank account did not make an allowance for overdraft transactions and the only money that could be transferred from it would be money that was actually present in the account.

Judge Peterson dismissed FNB's case and said that the fraudulent actions took place because the bank's computer software failed to stop the unlawful transaction. FNB called the processing of the transaction an error, however, the judge found that the bank's so-called error put all their clients at risk.

"It is clear that the so-called error points to a compromised computer system, where all of the bank's clients appear to have been at risk," stated Judge Peterson.

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Although Kgethile was found to have been negligent in providing his personal information, the judge stated that FNB failed to prove Kgethile actually authorised the transaction to take place.

"The bank, in particular, failed to prove that it acted on the instructions of the respondent to affect the said payments when the transactions occurred over a two-day period," said Judge Peterson.

Former Transnet executive ordered to repay R26 million by Special Tribunal

In other business-related news, Briefly News reported that the former head of Capital Projects at Transnet, Herbert Msagala has been mandated by the Special Investigating Unit's Special Tribunal to pay back over R20 million in undue profits to the company.

A ruling by the Tribunal found Msagala guilty of secretly pocketing profits and that he had an unethical relationship with the company's supplier, IGS Consulting, according to eNCA.

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IGS's sole director Sipho Sithole, the Msagala Family Trust, Msagala Residence Trust and Msagala's co-trustee in the trusts, Roberto Jorge Velosa, were also ordered to repay Transnet.

Msagala's unethical inappropriate relationship with IGS Consulting was revealed after an investigation was conducted by the SIU. The SIU investigated a Transnet project called New-Multi Product Pipeline, which was managed by Msagala, according to TimesLIVE.

Source: Briefly News