Banks banned from transferring your money between accounts
- A high court ruling has confirmed that banks are not allowed to transfer your money without your permission to other accounts you hold with the same bank.
- Banks may not transfer money from accounts with positive balances to accounts which have fallen behind.
- The National Credit Regulator brought a case against Standard Bank to confirm that the so-called "set-off" rule does not apply to credit agreements.
- For more stories, go to Business Insider South Africa.
The High Court in Johannesburg has ruled that is illegal for banks to transfer your money – without your permission - to repay debts on other accounts you hold with the same bank.
This means that your bank may not move money from your cheque or savings accounts to your credit card, bond or vehicle loan without your permission.
This puts an end to the practice where banks transferred money from positive balances to accounts which have fallen behind.
The National Credit Regulator (NCR) brought a case against Standard Bank to confirm that the so-called “set-off” rule does not apply to credit agreements.
The set-off rule in common law is applied when two persons owe each other and the debts are settled by setting the debts off against each other.
“The NCR welcomes this judgment as it protects consumers from financial difficulties caused by the arbitrary transfer of funds from their accounts by banks”, says Nomsa Motshegare, Chief Executive Officer of the NCR.
“Banks should obtain permission from consumers before transferring funds from consumers’ accounts to pay amounts due under credit agreements”, Motshegare added.
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