Internet fraud - what can you do about it?

Many people use internet banking on a regular basis. Miltons Matsamela sent us an interesting article explaining a recent court case regarding internet fraud. (May 2019 Miltons Matsamela).

In these days of online banking and electronic payment, it's not uncommon to find out to your horror that you have made a payment to someone in error, either to the wrong recipient or in an incorrect amount. If that happens to you and the recipient refuses to pay you back, what can you do about it?

In this case, a couple were the happy beneficiaries of a malfunction in their bank's "remote banking" app and received duplicate transfers into their two accounts adding up to R860,000. The bank duly sued them for return of the money, but the couple denied that any duplication had taken place. At trial they dropped their denial, claiming instead to have repaid the bank in cash. The husband's story was that he had paid a bank employee, since deceased, who had put the cash into a safe "in case a claim was made". He was unable to say how much money had been handed over, he could not give dates, and no receipts were requested or given. The husband's version was rejected as "inherently improbable", and the couple was ordered to repay the bank together with interest and legal costs.

What must you prove?

The requirements for an unjustified enrichment claim are -

1. The recipient has in fact been enriched by receiving the money (it needn't be money, it could for example be an asset of some sort)

2. You have been "impoverished" by the transfer

3. The recipient's enrichment was at your expense

4. The enrichment was legally unjustified.

Once the couple admitted receiving the money without a legal basis, held the Court, the onus shifted to them to prove that there was no enrichment. So their failure to prove repayment was the end of their case.

The other side of the coin is whether the recipient of an unexplained and unexpected bank account credit can safely go ahead and spend the windfall (the answer in a nutshell is very strong "no" - if there are indeed any free lunches in the world, this is unlikely to be one of them!).

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