Online Fraud: Absa takes Client to Court

The Financial Technology portal reports that Absa one of South Afric’a “big four” has taken a client to court over a matter of online fraud.

The full report, which you can access at http://www.financialtechnologyafrica.com/Online_Fraud_Absa_Drags_FoneWorx_to_Court.htm , reads:

‘Johannesburg, South Africa: Big four bank Absa has denied any liability in a fraud case that saw R3 million illegally moved from FoneWorx's accounts. FoneWorx says just over R3 million of its money had been fraudulently moved out of its eight Absa accounts into 183 unknown, and unauthorised, Absa accounts, in February.

It has since recouped R1.56 million of the stolen funds, and now wants the rest paid back to it. CEO Mark Smith says the balance of the missing money was transferred into the company's attorney's trust account, but then again removed by Absa.

The bank claimed the money had been wrongfully transferred and was actually a duplicate payment, he says. But Absa's head of media relations, Patrick Wadula, insists this is a duplicate payment, which FoneWorx has “refused to repay to Absa”. He says the bank has instituted legal action against Foneworx and its legal representatives, Martini-Patlansky Attorneys, for the return of the duplicate payment.

The bank also denies liability for the money having been illegitimately transferred in the first place. Wadula says Absa “at no time had access to Foneworx's cash focus system”. He says the system is operated and managed by the client's system manager, and Absa has no right of access to or control.

“The only way to gain access to the cash focus system and, in turn, to transfer funds on the system is by way of passwords held by the client or its employees and agents. Absa has no knowledge of these passwords,” says Wadula. He adds that the bank is not liable for the wrongfully transferred money.

However, Wadula says, there have been similar, though minimal, incidents previously. “Absa constantly warns its clients to protect user identities and passwords and that security measures must be put in place to ensure that such information is safeguarded.”

Advocate Clive Pillay, the ombudsman for Banking Services, says he is not aware of this matter. However, he says: “In terms of the Code of Banking Practice, banks undertake to provide reliable banking and payment systems services and to take reasonable care to make these services safe and secure.” '