Banks must stop pulling a Pontius Pilate and washing their hands of their clients’ plights

Pontius Pilate was the Roman governor of Judaea at the time of the crucifixion of Jesus Christ. Knowing Jesus to be innocent of the crimes of which he was charged, he nevertheless handed Jesus over to the Jewish elders for trial and conviction, and then carried out the sentence that they imposed. With a view to exculpating himself, he publicly washed his hands to symbolise his cop out.

Recent experience suggests that our banks, or at least some of them, have set Pontius Pilate as a role model and are intent on emulating him. This in the context of banking fraud, which has become an all-too-pervasive modern plague. They simply wash their hands of their clients’ plights.

Two examples will be cited. They are reported by Good Samaritan, an experienced attorney, who will be called Sam for short. Sam, acting pro amico, has assisted two separate parties who have recently been the unfortunate victims of banking fraud.

The first case involves Ruth (perpetuating the biblical imagery), a pseudonym. Ruth is a senior lady, who is widowed, lives alone in her house, and is not well versed in money matters. She is a good, honest, dependable person, like her namesake.

Ruth had her house painted by a painting contractor, whom we shall call Judas. The house was painted in two stages. Upon the completion of the first stage she paid Judas’ invoice which she received by email. The payment was made by an EFT transaction directly by her moneylender (bank), which goes by the pseudonym Primum Nationalis (PN) , into an account at Capitis Technica (CT), the pseudonym for Judas’ moneylender (bank), which bore Judas’ name.

Upon completion of the second stage of the job, Ruth again received an email from Judas incorporating an invoice in PDF format. She repeated the payment process and paid the amount into the bank account stated on Judas’ invoice. It subsequently transpired that the account number as quoted in the invoice was different to the one into which the first payment was made, although the name of the account was the same.

When Judas advised Ruth that he had not received payment of the second invoice, enquiries showed that payment had been made into an account that was allegedly not held by Judas. Judas immediately claimed that his email submitting the second invoice had been hacked so as to insert a different bank account number in it. Since he had not received payment he demanded that Ruth make a further payment into his correct bank account.

Ruth took the matter up with her bank, PN. They said that they could offer no assistance and referred her to CT, at the same time advising her to report the matter to the police, which she did.

CT confirmed that the money had been received into a different account to Judas’ regular account but would not divulge any information as to the identity of the account holder of the spurious account. They also took no steps to retrieve the money paid into the “wrong” account or to offer Ruth any assistance to recover the money in question.

The police ultimately advised Ruth that they would not be pursuing the matter as “no crime had been committed”.

In the meantime, Judas was aggressively badgering Ruth to pay the money which she “owed” him and threatened to institute court proceedings against her. He adamantly disavowed any liability on his part for the abortive result of Ruth’s payment and held her entirely responsible for the amount due to him.

Ruth turned to attorney Sam for assistance. Sam opined that Ruth was not liable to make a second payment as she was not at fault in the matter. He sought the opinion of an eminent senior counsel, who had also served as a judge. We shall call her Deborah, after the biblical juristic figure of that name.

Deborah was adamant in her view that Ruth was not liable to Judas for a further payment. Her view was coincidently shared by the Johannesburg High Court in a case where in similar circumstances the attorneys, ENS, were the payee. The court held that a business payee in these circumstances must take steps to ensure that payers cannot be duped in this manner.

Deborah’s opinion and the ENS decision caused Judas to back off from his vendetta against Ruth. But, assuming that he has no connection with the spurious account, this leaves him out of pocket. The ill-gotten gains reside in a bank account at CT and under their control and jurisdiction, and operated by them for one of their clients.

They were instructed to credit Judas’ account by name. What is their responsibility to rectify the situation? Alas, they simply reached for the soap and the hand-washing bowl.

Deborah said the following:

“In my opinion banks should accept a high responsibility… Banks are not there, as they seem to believe, to look after their own interests. They are there to serve the public and they should act accordingly... Banks should enter into agreements of cooperation in order to cross reference account holders’ names and account numbers and take more responsibility. They should not be allowed to opt out of responsibility.”

“Our investigation reveal (sic!) that our mutual client was an unfortunate victim of a criminal activity named “Shoulder Surfing”… the Bank was not at fault as your client’s PIN was compromised by himself at the time… and the disputed transactions were concluded before the incident was reported to the Bank.”