Pensioner’s money pain may come back to haunt bank

Absa Bank has repaid a pensioner R2,000 of her R2,250 pension it had taken from her after it had failed to take off credit card payments for months, following an inquiry by The Citizen – however the matter hasn’t ended there.

It all began when pensioner Adele Meusel looked at her account on June 25 to find a balance of zero.

“I usually have about R1,000 or so left which I have to live on, and the bank took it all this month,” Meusel said.

According to her, she had been paying her credit card monthly and found out when she contacted the bank it had not taken a payment since February.

“I hadn’t noticed it hadn’t gone off, and I said to the bank they couldn’t just take money without speaking to me, and the woman on the line said oh yes, they can.”

Actually, banks may not remove money from people’s accounts without the account holder’s permission, and there is a long-standing law protecting consumers on this.

On June 27, the High Court of South Africa Gauteng Local Division, Johannesburg, re-affirmed that in light of sections 90(2)(n) and 124 of the National Credit Act 34 of 2005, the common law right to set-off (take money for unpaid debt) is not applicable in respect of credit agreements which are subject to the National Credit Act.

Breaking it down, section 90 (2) stated: “A provision of a credit agreement is unlawful if (n) it purports to authorise or permit the credit provider to satisfy an obligation of the consumer by making a charge against an asset, account, or amount deposited by or for the benefit of the consumer and held by the credit provider or a third party, except by way of a standing debt arrangement….”

Tejal Desai, head collections and debt review, everyday banking, Absa Group, said while he appreciated being informed of the matter, there was a limit to the information he could provide due to banker/client confidentiality.

“For clarity, a ‘set-off’, or the deduction of amounts owed by the customer to Absa, from amounts Absa owes the customer, is always the last resort when dealing with customers who are in arrears,” Desai said.

“Moreover, this is only applied in instances when all other avenues to collect the debt have been exhausted and have proven to be unsuccessful. Notwithstanding our confidentiality obligations, our preliminary investigation suggests that there may have been a deviation from our normal collections procedure, which requires a certain amount to be left in the customer’s account.”

Desai stated while no payment arrangements were in place when the funds were collected the bank would be contacting Meusel to rectify the matter, “…as this deviation is a concern to us”.

“Our internal investigation will help us get to the bottom of the matter,” Desai said.

Absa still appeared to have contravened section 124 of the National Credit Act subsection (2) which stated before making a single charge, or the initial charge of a series of charges, to be made under a particular authorisation, the credit provider must give the consumer notice in the prescribed manner and form.

This was not addressed in Desai’s response.

Meusel’s daughter – and lawyer in this matter – attorney Tracey Lomax-Nixon, said she was not giving the matter up as there had been far-reaching and traumatic consequences.

“I think it’s appalling behaviour,” Lomax-Nixon said, accusing the bank of knowing Meusel only received limited funds every month.

“After their admission that they deviate from policy when it suits them, I now intend to force them to deal with the Ombudsman and National Credit Regulator and prove every cent they want to claim. For instance, they may have charged fees for the deduction and reversal. If banks want to behave in this fashion they must expect that we distrust them.”

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