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Investment Funds

On giving notice on his investment account, the complainant asked the bank to transfer his investment funds into his current account. He was told that the funds would reflect within 24 hours.
One day before he had given the bank notice, unauthorised withdrawals using a card and PIN were made from his account.
The complainant claimed that the funds were transferred before he gave notice and that this opened the door for unauthorised withdrawals from his current account. He demanded a refund. Available information proved that the complainant provided the bank with notice only two days after the transfer. Thus the bank failed to comply with the customer's instruction, causing losses. The OBS found the bank responsible for the full loss of R1 800 and instructed it to pay an additional R500 for distress and inconvenience.

Lesson to be learnt
Although the unauthorised withdrawals could not have taken place without the customer's card and PIN, the bank failed in its duty to carry out the customer's instructions. The bank also failed in its duty to act reasonably, fairly and ethically towards the customer. Furthermore, the bank has a duty to provide reliable banking and payment systems services

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