Ruling welcomed on banks deducting unauthorised account fees
The credit regulator has welcomed a high court decision prohibiting banks from taking money from their client's accounts in order to settle another debt without their consent.
The National Credit Regulator took Standard Bank to court after complaints that the bank was taking funds from the accounts of clients who were falling behind on various instalments.
The NCR's Anne-Carien Du Plooy says the bank and others were making use of a loophole in the application of the common law principle called set-off.
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Du Plooy says this now means banks no longer have the authority to dip into your cheque or savings accounts without your permission - in order to service credit card, bond or car instalments, even if with the same bank.
