● Wendy Knowler: Bank's incompetence made this driver's blood boil

How Standard Bank client Sibusiso Lizwe of

Sunninghill came to pay for a second, superfluous car insurance policy for almost four years, without his knowledge, is — in his words — “utterly beyond belief”.

And I have to agree. At best, it was gross incompetence; at worst … well, read on and draw your own conclusions.

When Lizwe bought a new Kia Rio in May 2017, the finance and insurance (F&I) employee at the dealership arranged both his finance with Standard Bank’s vehicle asset finance (VAF) division and an insurance policy on the vehicle, with his consent.

The finance contract he signed states: “You must ensure for the duration of this agreement that [the car] is comprehensively insured … and we are provided with proof of such insurance.”

And this: “Where you fail to insure the car, or provide proof that it is insured, we will have the right, but not an obligation, to insure it in our name and/or your name, at your expense, with an insurance company nominated by us.”

A few days later, Lizwe was offered a better insurance deal on the car and switched insurers, forwarding the dealership’s F&I his new policy document in an e-mail.

She responded: “Thanks, will forward to the bank.”

In May 2019, Lizwe started a new job, earning a higher salary, so he e-mailed the bank, asking for his monthly car instalment to be increased — from July that year — from R4,800 to R9,500.

When the bank acted on that instruction a month earlier than instructed, he demanded, and received, a refund.

“Come July, they deducted about R6,200, instead of R9,500, so again I queried that via e-mail, twice, with no response.

“But I was relatively satisfied with paying slightly more than the agreed instalment of R4,800, to avoid having to pay a R66,000 balloon payment at the end,” he said.

So he left it at that. What he didn’t know was that “extra” payment he was making wasn’t reducing his car debt; it was a R1,516 insurance premium on his car, being paid to Hollard by Standard Bank — which earned a commission on the deal, of course.

That only came to light last week when he received an SMS from the bank’s VAF division about the balloon payment, due on June 1 this year.

“I responded and then got a call from an agent to discuss my options,” he said. “When she said my instalment was about R4,800, I corrected her, saying I had been paying much more every month, and that’s when I was told about that second policy.”

He insisted he had not received any emails requesting proof that he’d insured the car; nor notification of the imposition of the Hollard policy, much less a policy document setting out its terms.

I had a lot of questions for Standard Bank. If it was so imperative for Lizwe’s car to be insured, why wait two years to impose the policy? And why not get hold of him by phone before doing something as drastic as unilaterally imposing an insurance policy on him, at his cost?

And why, when he contacted the bank requesting that his instalment be increased, did the VAF agent he spoke to not tell him that the bank had been e-mailing him repeatedly, requesting proof of an insurance policy on the financed car? Remember, that Hollard premium was added to Lizwe’s repayment right after he instructed the bank to increase his repayment amount.

Cyril Zhungu, the bank’s head of automotive finance, said they added the Hollard policy in mid-2019 after five failed attempts over an eight-month period to contact him about the insurance issue.

“This customer has used the same e-mail address to engage with the bank. Therefore, it is clear that he was also receiving e-mails from the bank,” Zhungu said.

The policy document and premium increase notifications were also sent to Lizwe, he said.

As for why they didn’t just phone him: “Several attempts were made to get hold of him. There seems to have been an error with the last digit on his phone number. We are investigating how this may have happened.”

Lizwe then revealed that the e-mail address the bank had been using for him was also incorrect — one letter of his name was omitted.

“This is very odd and suspicious,” Lizwe said.

Asked to clarify the oddities, Zhungu said: “The problem area in this matter was that we did not capture the client’s contact details correctly. [So] while we may have sent the correspondence as required, the customer never received this.

“We have apologised to our customer and confirmed that a refund for insurance premiums will reflect in his account on March 17. We believe this is an isolated incident, which we are investigating to prevent future occurrence for the client.”

It only struck me when writing this column that when the bank’s VAF people wanted to engage with Lizwe about his balloon payment last week, they sent an SMS to his correct number. So it appears they had both a correct and incorrect cellphone number for him, and happened to use the right one when they wanted to engage with him about settling his debt.

Lizwe did get all those premiums back on Friday — R66,000 — which more than settled his balloon payment, so he achieved his goal, albeit in a way he could never have imagined.

Standard Bank says it encourages its customers to review their statements regularly, “and to bring any discrepancies to the bank’s attention, be it potential fraud, or as in this case, an error on the bank’s part”.

Great advice, but of course had that Hollard policy premium been a separate debit order, instead of being “bundled” with his car repayment, Lizwe would have spotted the problem on his statement.

The Payment Association of South Africa tells me there’s no prohibition against bundling debit orders together. As this case demonstrates, there really should be one.

* You can contact Knowler for advice with your consumer issues via e-mail:

consumer@knowler.co.za (mailto:consumer@knowler.co.za) or on Twitter: @wendyknowler