In a recent judgment in the Pretoria High Court, a R200 000 claim by an attorney who lost this amount as a result of a phishing scam was turned down because the court found that the attorney’s negligence had contributed to his financial loss.
Attorney Jaco Roestof claimed this money from a law firm, Cliffe Dekker Hofmeyr Inc (defendant), because the money from his personal Absa account was channelled through this law firm’s trust account.
The firm, however, believing it was a genuine transaction, paid the money out to a close corporation, as it was instructed to do by “a client”.
The latter issued the law firm with the “necessary documents”, and all seemed in order.
Judge Ben du Plessis said there was thus no negligence on the part of the law firm, as it had no idea that this money had emanated from a scam.
It emerged that an internet fraudster on January 14, 2010 transferred about R350 000 from Roestof’s personal account, of which R200 000 was transferred to the defendant’s law firm’s trust account at Standard Bank.
The fraudster gained access to Roestof’s money, as the latter reacted on a phishing scam – a trap which tries to “fish” for people’s personal banking details.
In Roestof’s case it was an e-mail in which he was instructed to provide, via the internet, certain of his banking details “to his bank”. He was instructed to click on a link that took him to “Absa’s webpage”. He also went through the “normal security processes” and was even warned of phishing scams.
No alarm bells went off, as Roestof had, prior to this, experienced some problems with his internet banking.
An IT specialist at Absa gave a detailed account to the court as to how Absa went about its internet banking to ensure that clients are safeguarded. Judge Du Plessis was told about each security step a client had to follow when doing internet banking.
The bank also repeatedly warned clients against phishing scams via advertisements on the screen while a client is busy with a transaction. The court was told that no bank would ever request clients to provide their internet banking details via e-mail, which is what happened in this case.
During this time, while Roestof provided his banking details via the scam, an employee of the defendant law firm received instructions from a “client”, which the employer had never met, to transfer money to a close corporation.
The law firm was given all the details relating to the R200 000 which would be paid into its trust account, including all paperwork as to comply with Fica. The payment reference was “service charges”.
The law firm, “as instructed”, paid over the money after subtracting the commission owed to it for facilitating the transaction. By the time it was realised that it was a scam, it was too late to do anything.
Judge Du Plessis said in his ruling that as soon as the owner’s money is paid into an account and it is mixed with other money in that particular account, the initial owner of the money loses his right over it.
The judge said the defendant had no idea that the money belonged to Roestof and originated from a scam
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He said Roestof did not deny that he saw all the warnings relating to phishing scams, but he in fact said he never read the warnings. “This, in itself, is negligent,” the judge said. -The Star