Lawyer's bid to close down digital banking platforms flops

A HARARE lawyer's attempt to have all mobile-based digital banking platforms of FBC Bank closed after an imposter used his name to fraudulently open an account with the bank for criminal activities, failed after the High Court denied the request since the lawyer had not opened the account and so had no grounds to sue.

Mr Nigel Sithole sued the bank after an imposter fraudulently opened a bank account in his name to dupe members of the public of their money through a car hire-to-buy scheme posing as the lawyer to gain people's trust. Those entering the scheme would deposit money into the banking account number 6017042200218469 held with FBC Bank.   

The scam came to Mr Sithole's attention on January 31 this year when a Facebook user called Samantha Ndaba posted on his Facebook page demanding repayment for the money that he had allegedly swindled from her. Upon engaging the woman, Mr Sithole discovered that some person unknown to him had opened a bank account with FBC Bank in his name.

The person was advertising the sale of cars was luring victims to part with their money under the belief that they were dealing with the lawyer.  

Mr Sithole reported the matter to police and the Law Society of Zimbabwe. He also made an official complaint to the bank's security and loss control department, where it was established that the imposter had even used a fictitious address, number 1034 Mabvuku.

A bid to trace the imposter reached a dead end and the bank went on to shut the fraudulently opened account. After engaging the bank, Mr Sithole subsequently sued the FBC Bank along with the Reserve Bank of Zimbabwe.  

He sought an order compelling the bank to shut the bank's three digital banking platforms: the mobile banking platform under USSD quick code*220#; WhatsApp digital banking platform marketed as Noku under WhatsApp number +263 776670211 and the mobile software application called Mobile Moola App.

He argued that the digital banking platforms were operating in breach of the provisions of the Money Laundering and Proceeds of Crime Act with little regard to Know Your-Client verification process provided for in the Act.  But Justice Esther Muremba dismissed the application, saying Mr Sithole had failed to establish that FBC Bank was liable for the relief he was seeking. It was the court's finding that Mr Sithole did not have a cause of action under the Act.  

Justice Muremba said Mr Sithole could not claim that he was suing in contract simply because he had given a narration of events he said entitled him to the relief. A contract which was fraudulently entered into in the name of another person without their knowledge and consent was not consistent with the doctrine of freedom of contract.

"As such, such a contract was not valid and it created no rights and obligations between the parties," she said.

None of the parties could act and sue upon it. Since Mr Sithole did not open an account with FBC and neither did he authorise anyone to open an account on his behalf, so he had no contract with the bank for him to sue it, ruled Justice Muremba.

"There is no cause of action which entitles that applicant to be granted the reliefs that he is seeking," she said. In her ruling, Justice Muremba noted that Mr Sithole suffered harm as a result of the bank account that was opened with FBC Bank by an imposter in his name.

She agreed with Mr Sithole that FBC Bank created a system that was open to abuse as evidenced by the fact that Ms Ndaba was duped into depositing money into the fictitious account. However, it was the court's final ruling that an interdict was appropriate only when future injury was feared.

This meant Mr Sithole had the onus to establish on a balance probability that there were grounds for a reasonable apprehension that the injury that occurred to him would be repeated in future, which he failed to do.