First National Bank has refused to fall in with a recommendation by the
Banking Adjudicator following a dispute between the bank and a construction
company.
David John, the Acting Banking Adjudicator, said he received a complaint
about FNB last year from a building construction company, Engel and Ruyter.
The company had arranged to cash cheques or wages at an FNB branch closer
to its premises than its usual branch, for security reasons. The company`s
usual branch sent a letter to the other branch authorising the cashing of
cheques to a limit of R10 000 and later R20 000 a month.
But for years
cheques in excess of the limit were paid out, drawn fraudulently by the
company`s bookkeeper.
John found that the documents sent out by FNB were proof of an agreement to
draw only up to the maximum and recommended that the bank recompense the
company to some degree.
But FNB ``declined to fulfil the recommendation``, arguing, among other
things, that the bank should not be held liable and that the disregard for
sound business practices which allowed the fraud to take place should be
taken into account.
The adjudicator`s recommendations are not binding on the banks. All he can
do if the banks do not comply with one of his recommendations, is to
publish the name of the bank.
This is the first time that a bank has been identified as refusing to fall
in line.
In a report released last week, the adjudicator was scathing about banks
which ignored calls from his office to get their houses in order.
John said few of his comments on the shortcomings of the banks with respect
to service to customers had been taken to heart by the banks.
John has just handed over his office to Neville Melville, previously head
of the Independent Complaints Directorate.
Anyone with a complaint about a bank can contact the adjudicator, but you
should first try to solve the problem by approaching your bank directly.
All the banks have set up complaints procedures.