EFT payments and cybercrime: Court says car buyer is liable to ensure money is paid into the correct account
In a case involving cybercrime, the Supreme Court of Appeal ruled that it is the duty of a buyer to ensure that the money is paid into the seller's correct bank account.
Image: File
Cybercrime was once again the topic of a legal wrangle - this time before the Supreme Court of Appeal, which found that payment via electronic transfer (EFT) is only complete when the funds are received by the correct account holder.
This judgment followed legal proceedings between two car sale companies – with the one who bought two bakkies from the other only to discover after delivery of the vehicles that cybercriminals had intercepted the electronic payment made for the vehicles.
None of the parties were prepared to take the financial loss, and the seller initially turned to the regional court in Louis Trichardt to get its R290,000 back – the price at which it sold the two bakkies.
The lower court earlier ruled that Hyundai Louis Trichardt had to pay Northcliff Nissan the R290, 000 for the vehicles. The magistrate reasoned that the two car dealerships had a contract in place and, cybercrime or not, Northcliff Nissan was due payment for the two bakkies.
Aggrieved with this judgment, Hyundai successfully turned to the Limpopo High Court, sitting in Thohoyandou, to appeal the lower court's verdict. But Northcliff Nissan took the matter on appeal to the SCA. The risk of erroneous payment due to the cybercrime was that of the payer in this instance, the SCA found. 'A debtor bears the risk of misdirected EFT payments and must ensure that the payment is made to the correct bank account,' it said.
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The court added that the onus of proof in contract disputes over payment lies with the payer (debtor). 'Cybercrime risks do not automatically shift liability to the payee, and the courts will not impose an overarching legal duty on creditors to protect debtors from cyber fraud,' the court said.
The court was told that in October 2018, Hyundai purchased two Nissan bakkies from Northcliff Nissan for the sum of R145,000,00 each. Northcliff Nissan emailed the invoices for both vehicles to the buyer. The invoices provided details of the nominated bank account for payment of the purchase price for the bakkies.
On the same day, Hyundai paid for one bakkie and emailed proof of payment to Northcliff Nissan, after which the bakkie was then delivered. A few days later, Hyundai made another payment and took delivery of the second bakkie. At that stage, no one realised that cybercriminals were at work.
Approximately a week later, Northcliff Nissan told Hyundai that payment of the purchase price for the bakkies had not been reflected in its bank account. It then became clear to the parties that the emails had been intercepted and the bank account details on the invoices were altered by a cyber fraudster.
The parties realised that they were victims of business email compromise (BEC), a cybercrime that has become popular in this technological age of electronic communication and payment.
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