Is it time to spread liability?

CYBERCRIME: LOSS OFTEN DUE TO CONSUMER NEGLIGENCE, BUT SCAMS NOW MORE SOPHISTICATED

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Banks started warning consumers long before the start of the festive season that they must beware of cybercrime during the busiest shopping time of the year.

Consumers took the advice to heart, but what do you do if you are kidnapped, your phone taken and you are thrown our of a moving car, ending up under sedation in hospital?

This is what happened to a Johannesburg woman who could only report that her bank account was accessed by cybercriminals days after the incident.

Her bank’s answer: it feels very sorry for everything she has been through, but it did not find in its investigation that the bank was at fault. She would, therefore, not be refunded.

She spent the happiest time of the year in a wheelchair with no money. But this is nothing new, as you hardly hear of consumers who are paid back after losing money in cybercrime.

Prof Michelle Kelly-Louw, head of the department of commercial law at the University of Cape Town, said: “Like in many other countries, the law in South Africa generally holds the consumer liable for any fraudulent transactions until the point where the bank is notified of the loss. Only after this notification does liability shift to the bank.

“Therefore, the consumer remains responsible for any losses that occur before reporting the loss of the card or credentials, unless the terms of the agreement provide otherwise and the consumer gave timely notice.

“This creates a significant practical challenge, particularly for vulnerable consumers such as the elderly, low-income individuals, or those lacking digital and financial literacy.

“Contacting the bank to report a loss often involves long delays on call centres, during which time further fraudulent transactions can occur. Despite these inefficiencies, banks often still assign the loss to the consumer.”