Opinionista Marianne Merten 11 July 2017

I fought The Law and the Bank won

When a bank invokes “The Law”, but can’t actually name the law and makes up something called “an unnamed law” to obscure why it requires customers to hand over their personal details for a simple little deposit, it borders on abuse of power. No ID, no transaction – and with that injunction customers are bent to the will of a powerful financial services institution. Finish and klaar. Dear Absa CEO Maria Ramos, this is just plain nonsense.

It should have been simple. Walk into an Absa branch, hand over R220 for a deposit to secure a booking at a domestic venue whose account is with Absa. It turned out to be a most Kafkaesque experience, with senior Absa bank staff invoking a law described variously as “the money laundering law”, “the government law” and “an unnamed law”.

The deposit was not possible without an ID, driver’s licence or passport, not at Absa, although it would have been no problem at at least one other bank. It was the teller’s unlucky day. Somewhat educated, somewhat informed about consumer rights and somewhat familiar with legislative processes, I have never known when to shut up and just follow instructions. I am what is politely referred to as a difficult person wont to ask troublesome questions.

And so my question was: “What law?” The response was it was the “money laundering law”. Errr, that’s not a law. “The government law,” the teller responded as a colleague came out in support saying the law required this. But neither could say what the law actually was.

So it was off to the branch bank manager. And the response was the same: it’s the law. What law? I again asked, pointing out that the Financial Intelligence Centre Act and its amendment put the threshold at which banks have to report transactions at R15,000 to the best of my recollection. And the South African Reserve Bank, which was also invoked at one stage during the conversation, is more concerned with foreign transactions.

I did try to explain there cannot be an unnamed law, as the Absa branch manager called it – repeatedly – as that’s not how the legislative and governance processes work. An unnamed law simply does not exist. Like a law not signed into force by the president does not exist, and is therefore not binding. Yet.

The branch manager didn’t like being asked for an explanation as to what was “The Law” that was being relied on. At one stage there was evasive action like claiming I raised my voice, pointed silences and pointing out that I had already said “four times” the stuff about the Financial Intelligence Centre threshold. Okay. But I was still waiting for an explanation about which law was being referred to.

Eventually it emerged: there was a directive from the provincial head office, from Absa’s governance division. And now all systems have already been changed so no deposits could be taken without proof of identity. There also was some mumbling about a pilot project. The question why “The Law” was cited, and what law in particular, remained unanswered.

I have no problem whatsoever with a bank establishing its own rules as it’s their prerogative in our current financial services set-up. But then say so. Don’t cite “The Law”. That’s deception at worst, and disingenuous at best.

Invoking “The Law” to obscure internal arrangements is dangerous. It not only undermines consumer rights, including that to accurate information, and transparency, but also the broader public discourse on citizens’ rights and responsibilities. If the non-specific, obscure “The Law” is invoked, the power balance already tilted towards banks is further shifted in favour of those dressed in corporate outfits who have the power to deny access to financial services, not just deposits but also mortgages, loans, business start-up capital. The list is long and determinant of the financial well-being of ordinary South Africans, if not necessarily those determined by banks as preferred customers with access to personal bankers.

Questions also arise as to why Absa wants the personal details for basic transactions. With the protection of personal information legislation not yet fully implemented, is it to sell off personal details? It happens elsewhere in the commercial sector. An ID number means a person’s credit profile can be accessed, alongside residential and telephone numbers. It could be paranoia, okay, but remember all those unsolicited SMSed and phone calls for funeral policies, car and health insurances and more?

The demand for ID may well be related to the 2017 Financial Intelligence Centre Amendment Act, and could explain the bank manager’s mumbles about a pilot project. Without a clear indication, this remains speculation. But let’s go with it.

There are joint Reserve Bank/National Treasury/Financial Services Board approved guidelines on implementing the Financial Intelligence Centre Amendment Act, aimed to bring South Africa in line with international best practice.

But this document, like the Act, talks of differentiated risk assessment of customers, and lists a range of factors contributing to the risk assessment, from a client operating across borders, different sources of income, including from abroad, and political connectivity. The draft regulations talk of “risk scale” and state: “…an accountable institution’s systems and controls may allow for less information to be obtained, less secure confirmation of information to be applied and less frequent scrutiny to be conducted where they assess the risk of abuse to be lower. This is referred to as simplified due diligence”.

A deposit of R220 into a South African-held bank account cannot be in the same risk category as, say, a R1-million or even R100,000 transfer anywhere in and outside the country. And an across-the-board demand for ID simply makes a mockery of due diligence, although it would certainly make things easier for banks.

The financial sector is under scrutiny for practices that have left millions of South Africans unbanked 23 years into democracy, fees that depress just about everyone and decisions on loans, mortgages and services that regularly raise eyebrows.

The incident at Absa also highlighted that too few South Africans ask questions, whatever the reasons for that may be. My request to the teller, and later the branch bank manager, to name the law or even just the regulation that requires ID for a deposit, clearly baffled those concerned (out of respect, the Absa branch and its employees, who no doubt will say they are just doing their jobs, will remain unidentified).

But the lack of questions allows a situation of unimpeded obfuscation by those who already enjoy a large measure of power tilted in their favour.

I paid my deposit. Online. No hassles. But for hundreds of thousands of South Africans this is not an option, either because internet banking comes with an additional unaffordable charge, or the high cost of data or even just access to a computer or smartphone.

Questions need to be asked, and institutions held to account.

P.S. Dear Maria Ramos, maybe invest in some training for staff? And print some leaflets to explain the procedures of the bank you head. DM