S. A.

Tsegah v Standard Chartered Bank (GH) Ltd

In this case the plaintiff was a customer of the defendant bank and was issued with an ATM
card. According to the plaintiff, he never revealed his PIN to anyone and had never parted
with his card. In April 1999, he presented two cheques to the bank for a total amount of
¢850,000 and they were dishonoured. He was surprised by that because he was supposed to
have had a balance in his account far in excess of the total amount of the cheques. He
requested a statement and was shocked to learn that various withdrawals had been debited
to his account which he knew nothing about. According to him, during the period when the
withdrawals were recorded to have been made, he never gave his card to anyone; neither
did he make any withdrawals through the ATM.

The statement reflected very unusual withdrawals, sometimes several in a day. Moreover,
he noted that between 12th and 19th April, 1999, when some of the withdrawals were alleged
to have been made, he was hospitalized after having undergone surgery. He was
incapacitated and could not have gone to the bank. He stated that during his hospitalization,
his ATM card was locked up in his wardrobe in his room and no one had access to it during
that period.

When the plaintiff received the statement he lodged a complaint with the bank, protesting
that the withdrawals were fraudulent. In the defendant bank’s response to the plaintiff’s
letter, they informed him that their investigations indicated that his allegations of fraudulent
withdrawals were untrue and that they had concluded that the plaintiff had compromised
his PIN. They therefore refused to refund the amount that he claimed was wrongfully
debited to his account.

The plaintiff contended that the defendant’s conclusion was wrong and that the ATM
system was not foolproof. He cited instances where other customers’ accounts were
fraudulently manipulated and monies withdrawn. He insisted that some employees of the
defendants working at the computer department could obtain internal records to produce
additional ATM cards with the use of fake but functional cards and fraudulently use them to
withdraw funds from customers’ accounts.

The plaintiff called a witness who testified that he held two accounts with the defendant
bank, one at Osu and the other at High Street. The witness said that he had an ATM card for
his account at High Street, but not for the account at Osu. However, at a point in time he
realized that his Osu account wad debited with ATM withdrawals from ATM machines at the
Liberia Road, Opeibea House and Legon branches. He said that he wrote to the manger and
lodged a complaint. The bank apologized and refunded the amount which had been
wrongfully debited to his account.

The defendant bank denied the plaintiff’s claim, alleging that the withdrawals made to the
tune of ¢13.1 million were made through the plaintiff’s ATM card and PIN and that the
withdrawals could not have been made without the plaintiff’s card. They insisted that the
amount debited to his account was genuine and not fraudulent. A senior manager of the
bank testified that it had a card centre which produced the cards and the PIN. She stressed
that the card numbers were unique and could not be duplicated. She also told the court that
the personal identification numbers were produced automatically in a sealed envelope
which no one could have access to apart from the customer.
The issues that the court had to consider were:

1. Whether or not the ¢13.1 million debited to the plaintiff’s account by the defendant
was wrongfully done.
2. Whether or not the plaintiff allowed his card to be used by someone else to make the
withdrawals in question; i.e., whether the plaintiff compromised his card or not.
3. Whether or not the withdrawals were made through fraudulent means and whether
the defendant was liable for such fraud.

Counsel for the defendant bank submitted that when the plaintiff joined the ATM scheme a
special contract came into being between the parties and he implored the court to be
guided by those terms. According to him, the terms of the contract between the parties
with regard to the ATM scheme indicated that the plaintiff agreed to accept full
responsibility for all transactions processed from the use of his card. He added that the
defence had proved that all the transactions proceeded from the use of the plaintiff’s card.
Therefore, the debiting of the said amount to his account was not wrongful and the
defendant could not be held liable to refund the said funds.

Counsel for the plaintiff noted that electronic banking is a relatively new scheme in Ghana.
He submitted that the ATM system was not foolproof and that fraudsters could produce
fake cards and outwit the banks. He noted that the defendant admitted that the ATM
system was not foolproof and asked the court to disregard the alleged ‘contract’ between
the plaintiff and the defendant, because it was not the form that the plaintiff signed with
the bank. Evidence was also adduced to indicate that the ATM machines broke down often
and did not have the technology to detect the use of fake but functional cards.

The court found that there was no evidence that the parties had entered into a special
contractual relationship and therefore the case could not be determined on the alleged
terms. It also noted that an ATM is a computer and that computers can make mistakes. In
addition, the court took note of the fact that the defendant admitted that although the
machines were not foolproof, they did not have the technology to detect fraud.

The court was concerned that although the customer had requested a police investigation
of the matter, the bank refused to invite the police to look into it, because they wanted to
safeguard their reputation. That, according to the court meant that the bank would rather
‘hush’ allegations of fraud than deal with them with the help of the police. The opinion of
the court on that matter was that the defendant bank refused to allow a police investigation
because it was not ready to face the fact that there had been a fraud. It considered it absurd
that it was being called on to prefer the contents of a computer print-out which was not
foolproof to the evidence of a witness whose integrity the defendant admitted was not
doubtful.

In addition, the court observed that the pattern of withdrawals were such that the bank
should have made enquiries from the customer. Several withdrawals were made in a day
with only a few days between the various days.

Her Lordship Agnes Dordzie likened this case to the case of Judd v Citibank, where the judge
was faced with the question of whether to prefer the evidence of a credible witness to a
computer print out. She assessed the plaintiff as a credible witness and did not believe that
he made the withdrawals. She was of the opinion that his evidence far outweighed the
computer records.

In addition, the court found that the defendant had been negligent in operating the ATM
system without installing equipment for the detection of fraud. She stressed the need for
Ghana to enact laws on electronic banking. Judgment was given in favour of the plaintiff.