Alleged Unconscionable Conduct by First Capital Bank

In March 2021, CFTC commenced investigations against First Capital Bank for alleged unconscionable conduct in the supply of banking services.

It was alleged that on 4th April 2019, a customer opened a savings account at the Respondent’s bank in favour of a son with an initial deposit of MK100,000.00. It was further alleged that they made several deposits to the account thereafter.

It was also alleged that the account balance was MK1,477,166.90 as of 20th October 2020. Thereafter, allegedly, two more deposits of MK100,000.00 each on separate occasions were made.

However, on 1st March, 2021, the complainant was shocked to learn that the account balance was only MK206,659.00 against an expected balance of about MK1,677,166.90—over MK1.4 million had mysteriously disappeared.

When an inquiry was made about the anomaly, the Respondent alleged that there had been several transactions through Airtel Money to several phone numbers, amounting to MK1,476,990.00. However, the Complainant claimed that they had not conducted these transactions, and were not aware of such transactions.

CFTC investigated the matter under Section 43(1)(g) of the CFTA. The investigation established that the OTP for the account was generated on 24th October, 2020 for mobile application registration to the registered number in the system. Immediately after registration, money transfers were made. The Respondent’s position is that this could have only happened if the Complainants shared the OTP generated by the system.

It was the also submitted by the Complainant that on 24th October 2020, they received suspicious messages on their phone purporting that they applied for an online registration of a Mobile App.

The Complainant promptly reported to the Branch Manager of Limbe for action. The Branch Manager, allegedly promised to investigate the matter and get back to the Complainant. This did not happen and the Complainant assumed all was well until 1st March 2021 when they discovered that money had been disappeared the account.

The Respondent withheld some information from CFTC, despite being requested to do so and despite making an undertaking to share the information. This information would have helped the Commission to decide whether features of an “In Trust of Savings Account” were similar to those of a typical “Personal Savings Account”. It would also have helped to determine whether or not the Complainant signed up to the use of the Mobile Applications at the time of opening the account. The conduct by the Respondent, in this regard is a contravention of Section 50 of the Competition and Fair Trading Act (CFTA).

The conduct by the Respondent in handling the subject complaint was thus unconscionable. Despite lodging an official complaint with the Bank in October 2020 and despite the bank making an undertaking to investigate the matter and provide them with feedback, no communication was made.

The Commission resolved as follows:

  1. The Respondent should refund the Complainants a sum of MK1,476,990.00 which was transferred from their bank account due to the weak and unreliable mobile banking application with interest that would have been earned on the amount had it been in the bank.

2. The Respondent should pay a fine of Five Hundred Thousand Kwacha (MK500,000) for violation of the CFTA.

3. The Respondent should pay a fine of Five Hundred Thousand Kwacha (MK500,000) for refusing to furnish information requested by the Commission.