In last week’s edition we looked at a developing story on a customer/bank relationship that appears extremely confusing to both parties. Indeed, from the facts of the case, at face value, it would appear as if both banks and clients are unsure of their responsibilities when it comes to lending and borrowing but much closer look at the facts show a story akin to the lack of consumer protection agencies causing the banks to bully customers willy-nilly.
Okay, l ended last week’s submission by reproducing a portion of a letter written by the “legal advisors” of the bank to the client as follows:
“Our instructions are that despite all attempts all attempts made by the Bank to cause you to repay the facility you have failed, neglected and /or refused to repay the facility for well over six (6 years), and your current indebtedness stands at Fifty-Three Thousand One Hundred and Fifty Ghana Cedis and Ninety Pesewas (GH¢53, 150.90) which sum shall continue to accrue interest until the date of final payment”.
So let us now look at how apparently a non-contracted amount of a little over GH¢14000 in 2008 had grown to GH¢34720.23 as at May 31, 2012 and GH¢53,150.90 as at June 9, 2014, as per the letter written by the bank’s lawyers. And it is still growing by the hour.
First off, documents sighted shows that the account became operational on August 1, 2008. In fact, the unusual portion of this state of affairs is that because the account was expected to be a “special” one, because it was set up mainly for the project, it had no cheque book attached. Therefore, it was not supposed to enjoy any other normal banking facilities such as overdrafts.
Also, payments from the account was per advice only, where instructions are issued to the bank on a letterhead and payments are to be done only when there was credit in the account.
The other interesting part of this is that the initial request for the bank account was for an escrow dollar account and not for a Cedi account.
In fact, what appears to have happened was that a third party payment was received in Cedis, and as the bank only had a dollar account for the client, it quickly opened a Cedi account on the strength of the existing dollar account into which the cedi amount was paid.
But all records show that over 98 per cent of transactions by the company were conducted on the dollar account with only a total of 19 transactions conducted on the Cedi account from August 1, 2008, to August 31, 2009, apart from debit interest amounts by the bank. The account was to run for the period August 1, 2008, to August 31, 2009.
A careful scrutiny of the bank statement shows that from August 31, 2009, the bank started applying monthly interest on what they felt was an outstanding balance when indeed the accounts should have been closed by the bank by then and all outstanding amounts claimed.
“Because they were made aware that the accounts was for a period of time, and indeed for that reason they had also opened a ‘temporal’ account for the project, the closure should have happened”, a corporate lawyer opined.
Meanwhile, the letter from the “legal advisors” dated June 9, 2014 stated that “Our instructions are that sometime in 2008 you overdrew your account ……which facility became an overdraft on your accounts”, suggesting that indeed there was an arrangement between the bank and the client on the said overdraft facility, whether it was authorised or not. It wasn’t so at all.
Some of the officers that worked on the project as consultants or signatories to the account are at a loss as to how such a situation could arise, blaming pure negligence on the part of the bank, if indeed whatever is stated reflects the true picture.
Clearly, it appears that the bank lost track of what was actually happening to that particular account either out of incompetence or sheer ignorance because from August 2009, it was only about two months ago that the bank, through an email to signatories to the account, sprung a surprise with a statement on the account.
But the project ended five years ago and the two companies that collaborated have closed that chapter. Worryingly, the local company that had partnered the foreign one is no longer trading!
That a bank could go five years without contacting a client whose account had fallen so much behind is worrying.
Well, l believe, and quite strongly too, that there is the need for the banks to do more to restore confidence by way of working much more closely with clients than they do now.
In the concluding article next week we will look at what the experts are saying about the actions of the bank and what legal recourse is available to those who the bank is now indirectly asking to pay for an amount owed by a different entity.
