“I recently purchased a motor vehicle and paid the deal by way of electronic fund transfer. The motor dealer and I have been communicating via emails for weeks prior to the payment and amongst these emails, the motor dealer provided me with their banking details. I made the payment into the account so provided to me via email only to find out that the banking details of the dealer was changed by an unknown person who hacked our communication. I paid R800 000.00 towards this vehicle, and now the dealer refuses to give me the vehicle as they did not receive my payment.?”

With the current technological advances and the fraudsters being more computer savvy than the normal man on the street, it is important to remain vigilant on identifying fraud to prevent fraud and fraudsters to cause you financial loss.

Unfortunately, the principle when being confronted with the set of facts as indicated in the question above, is that the debtor should seek out its creditor. This principle was crystallized as far back when most payments were still done via cheques.

The Courts have adapted and applied the very same principle, to today’s modern age technology when dealing with payment being made via electronic fund transfer.

It is no secret that, most people are aware of the fact that Cyber Hacking is not a made-up Hollywood movie, where the hacker will only attempt to hack the richest bank in the world, but that these hackers, target the normal individual or company.

This happened in the matter of Galactic Auto (Pty) Ltd v Andre Venter a matter in the High Court, Limpopo Division, where the court was called upon to resolve a dispute between the parties, where Mr Venter purchased a vehicle from Galactic but the payment was intercepted by a fraudster.

In this matter Mr Venter was able to prove that the hacking of the system, which caused the payment to be made another account and not to Galactic was in fact on the side of Galactic.

Despite this, the Court held that, and by applying the abovementioned principle, the debtor being Mr Venter held the onus to ensure that he pays the correct creditor and found that Mr Venter was to either return the vehicle or to make payment once again but correctly to Galactic.

In another matter Gripper & Company v Ganedhi Trading Enterprises CC, Western Cape High Court matter, this principle was once again applied.

In this matter Ganedhi Trading purchased equipment from Gripper and paid an amount of R800 000.00 towards this equipment.

Shortly prior to making payment, Ganedhi received an email purportedly from Gripper in which Gripper informed Ganedhi that they have changed banking details and that henceforth Ganedhi must use the new banking details.

It needs to be mentioned that at that stage, the parties have been doing business with each other for many years.

When the court then applied this principle, Ganedhi was ordered to make payment, once again, in the amount of R800 000.00 as the first payment was not made to Gripper. The court indicated that a mere telephone call to Gripper, upon receipt of the email confirming bank details change could have prevented the loss. 

This is thus important to first and foremost be aware of the fact that it is your duty as debtor, even when dealing with a small payment such as school fees, to ensure that the correct details were provided to you prior to payment.

To prevent this loss, a simple telephone call, can be made prior to payment to the creditor to confirm that the banking details which you were provide via email is correct.

Reference List:

Case no: 4052/2017, delivered on 14 June 2019