Cybercrime where money is paid into the wrong bank account is not unique. This kind of incident seems to occur often - the comment of the judge in a recent Supreme Court of Appeal (SCA) judgement where the court answered the question of who must suffer the loss of a payment into a wrong bank account due to cybercrime.

The essential facts of the case involved the sale of motor vehicles by one vehicle dealer to another. It was agreed between them that the seller will send the invoices on which the bank account of the seller is reflected by e-mail to the purchaser. 

On receipt of the invoices the purchaser paid the purchase price into the bank account reflected thereon and sent proof of the payment to the seller who then released the vehicles for delivery without checking that the money appeared in the it’s bank account. On the proof of payment a different bank account number than that of the seller was reflected.

The seller instituted an action for payment in the Regional Court. A computer expert gave evidence on behalf of the seller that there was no interception of the e-mail until it left the server of the seller and the logic deduction is that it occurred after it left the seller’s server. The purchaser did not produce any evidence to refute this.

The Regional Court found in favour of the seller as the payment into the wrong bank account was due to cybercrime, and that the purchaser ought to have verified the bank account details of the seller before making payment. 

The purchaser appealed to the high court and argued that the decision of the regional court was wrong in that it made a decision on the negligence of the purchaser. The evidence of negligent failure was not the pleaded case of the seller. The seller’s claim was based on breach of contract. The seller had to prove that the contract contained the additional clause that the purchaser must verify the bank account, which the seller did not prove.  The high court found in favour of the purchaser.

The seller appealed to the Supreme Court of Appeal who found that essentially the seller claimed payment and the purchaser alleged that it had paid. The seller proved that they did not receive payment in its bank account. For the purchaser to succeed with its defense it had to prove that it had paid and that the payment was into the bank account of the seller. For effective payment to occur a payee (the seller) must acquire the unfettered or unrestricted right to the immediate use of the funds in question, otherwise the payment is incomplete. Payment in the case of EFT only takes place when the funds are actually received by the payee in its bank account. The court found that the purchaser must suffer the loss of a payment into a wrong bank account in these circumstances.

If you do not want to suffer the loss, the duty is on you to make sure that payment into another person’s bank account is made into the correct account.