Banks started warning customers long before the start of the festive season that they must beware of cybercrime. Consumers took the advice to heart, but what do you do if you are kidnapped, your phone is taken and you are thrown out of a moving car, ending up under sedation in hospital? This is what happened to a Johannesburg woman who could only report that her bank account was accessed by cybercriminals days after the incident.
Her bank’s answer: it feels very sorry for everything she has been through, but it did not find in its investigation that the bank was at fault. She would therefore not be refunded. She spent the happiest time of the year in a wheelchair with no money.
But this is nothing new, as you hardly hear of consumers who are paid back after losing money in cybercrime. “Like in many other countries, the law in South Africa generally holds the consumer liable for any fraudulent transactions until the point where the bank is notified of the loss. Only after this notification does liability shift to the bank,” said Prof.
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Michelle Kelly-Louw, head of the department of commercial law at the University of Cape Town. “Therefore, the consumer remains responsible for any losses that occur before reporting the loss of the card or credentials, unless the terms of the agreement provide otherwise and the consumer gave timely notice. “This creates asignificant practical challenge, particularly for vulnerable consumers, such as the elderly, low-income individuals, or those lacking digital and financial literacy.
Contacting the bank to report a loss often involves long delays on call centres, during which time further fraudulent transactions can occur. Despite these inefficiencies, banks often still assign the loss to the consumer.” She says whileSouth Africa is still a cash-driven society, there has been an increase in the use of electronic payments, mainly by using payment cards. However, she points out that debit cards, South Africa’s second most commonly used payment method, are not governed by specific legislation regarding liability for fraud.
However, she says, credit cards are regulated under section 94 of the National Credit Act. “This section outlines the consumer’s liability for unauthorised transactions after the loss or theft of a credit card or identification device and the credit provider’s duty to take reasonable steps to limit the consumer’s loss.” Section 94 states that the document that records the credit agreement for credit facilities providing access to it by using a card, personal Identification code or number or similar identification device, must provide a contact telephone number where the consumer can report the loss or theft.
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