Banks are not obligated to refund accounts accessed by kidnappers
Many people who are held against their will by a kidnapper may offer up their personal banking information out of compulsion, but banks aren't always obligated to refund the stolen monies.
Criminals are suspected to have turned to kidnapping their victims as a means of bypassing the layers of security measures banks have taken to create a safer means of online banking.
You could say that this has opened up a whole new can of worms for both bank users and banks themselves. For one, kidnap victims cannot be blamed for giving up their confidential information when their lives are being threatened.
Sometimes, it's worse, their families are also being threatened, and it's like the saying goes, money can be made, one's life cannot be compared to money.
"Once criminals gain access to these platforms, they can alter account limits and make unauthorised transfers leading to significant financial losses in addition to the trauma of the kidnapping itself.” (Business Tech)
But as much as this situation calls for some relief on the victim in that they would expect a refund of their stolen money from the bank, it cannot be guaranteed.
If the victim shares their banking information with the criminal and all the security measures are passed, the bank is not liable to refund the money stolen.
Business Tech said: "If a banking customer’s details are compromised, they are usually held liable. Once the compromise is reported, the bank is liable, and it has a duty to mitigate any losses."
However, things don't always work out that way. In a case study that was shared on Business Tech, a victim of a kidnapping shared their banking details with the kidnappers while under duress and when the bank contacted them in the presence of the kidnappers, the victim authorised the transaction, which was R100,000.
The victim contacted the bank after the fact to inform them of what happened, but the bank was unable to refund the money as the stolen funds were already utilised.
The bank was not found negligent and therefore not held liable for the money that was stolen, however, the bank did agree to refund a portion of the stolen funds as an act of goodwill.
The National Financial Ombud Scheme (NFO) has suggested some preventative measures that can be taken by people. Courtesy of Business Tech.
- Pay caution when posting on social media - besides being cautious about posting your sensitive information, also pay heed to posting too much that would create a perception about your life.
- Be weary of wearing expensive items out in public. It is all well and good that you bought it so you would like to wear it out, but being mindful while out in public is important because criminals see Rand signs when they see your expensive accessories.
- This is an oldie but goodie - don't stick to a routine when moving around. "Diversify your daily activities to reduce predictability. Criminals may monitor predictable routines well before the actual crime is perpetrated in order to ensure that they are vulnerable to criminal targeting."
- "Consult your bank. Discuss the measures your bank may offer to help mitigate potential losses if you become a victim of any type of banking fraud. Many banks provide options to tailor your online banking and app experience, including limiting your exposure and risk."
- Investment options are a great way of protecting yourself and your money. Investing your funds in a notice account can potentially protect you from these sorts of crimes.
- Check with your bank if they offer "duress insurance".
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