First Capital ordered to refund K810,000 to customer

First Capital Bank has been ordered to refund K810,000 which was stolen from a customer’s bank account and sent to three mobile phone numbers.

The Competition and Fair Trading Commission (CFTC) which has made the order says the bank was negligent in implementing some of its security and control measures.

According to a statement released today and  signed by Acting Executive Director Apoche Itimu, CFTC held its 60th meeting in Salima on 26th November, 2021 where it considered and adjudicated over cases under the Competition and Fair Trading Act (CFTA).

The Commission commenced investigations against First Capital Bank which established that the Complainant received a call from a certain person, who claimed to be one of the bank’s employees and had the customer’s private personal information that was held by the bank. This person invited the customer to register his bank account, on the Respondent’s Mobile App transactions.

Thereafter, the Complainant received several messages on his phone indicating that there were some transactions being conducted on his account and yet he had not made any such transactions, as a result the complainant lost MK809,980.00 from his account to three mobile phone numbers.

The Commission found that the bank was negligent in implementing some of its security and control measures as the anonymous caller had the Complainant’s private information that was held with the bank which resulted in the theft.

“The Respondent’s mobile App did not have adequate security features which would prevent penetration of the system by fraudsters. Customer bank account transactions are supposed to be private and secure, and the general expectation is that they should not be accessed by a third party not in the bank’s employ.

“The Commission thus ordered the Respondent to refund the Complainant the sum of MK809,980.00 which was transferred from his bank account and to address the security concerns pertaining to their Mobile App as the Commission had received several similar complaints,” said Itimu.

The Commission also instituted investigations against First Capital Bank for alleged unconscionable conduct.

The investigations established that in 2015 the Complainant in this case opened an account with the bank. However, due to high bank charges the Complainant stopped using the account after only using it for a month.

In 2021 the Complainant was awarded a contract under which he was required to mobilize MK48,000,000,00. However, FDH Bank failed to give him the loan because his account with First Capital Bank had arrears in bank charges amounting to MK1,002,721.47.

The Commission found that there was inconclusive evidence to determine whether or not the customer had indeed submitted a request to close the account as alleged, as such they could not fault First Capital Bank in this regard.

However, the Commission found that the bank should have engaged the Complainant pertaining the accumulated bank charges on his dormant account that kept accumulating for years as well as the need to clear them and the consequences for failure to do so. They should also have given him a chance to clear them before referring the debt to Credit Reference Bureau.

“The Commission found that the Respondent’s conduct amounted to unconscionable conduct in contravention of section 43(1)(g) of the CFTA and ordered that the Respondent should pay a fine of Five Hundred Thousand Malawi Kwacha (MK500,000.00) for engaging in unconscionable conduct,” said Itimu.

During its meeting in Salima, CFTC considered and adjudicated over a total of 58 cases, which included 50 cases of unfair trading practices and 8 cases of anti-competitive business practices.

During the sitting, the Commission ordered companies to pay fines totaling K11 million and refunds of over K2.9 million, for committing different offences.