Relook banks' unilateral right to debit funds

I read with unease DBS Bank's handling of funds credited to Mr Raymond Koh's bank account ("DBS clears $600,000 cheque 'by mistake'"; Tuesday).

In the report, it was stated that DBS' terms and conditions governing customer accounts accord the bank a unilateral right to debit any wrongfully credited sum from an account holder.

Where large personal sums are concerned, why should the law permit such terms bestowing a bank discretionary powers to decide customers' rightful sums in their own bank accounts?

If unjust enrichment is alleged, the bank should, in the interests of fairness, be required to file a claim to a third party for adjudication.

Instead of the bank initiating action to resolve the dispute, customers are currently presented with a fait accompli, with room to dispute the bank's claim only after the fact. Moreover, such action amounts to an invasion of privacy.

The bank is currently neither obliged to notify nor seek the consent of customers for the withdrawal of funds from their own accounts.

Such a situation leaves no room for consumer safeguards to dispute the mistaken sums at the time of the bank's rectification.

Customers might not even know of the withdrawal unless notified at the bank's pleasure.

As ordinary consumers remain at risk, I hope that the authorities will take steps to clarify this matter.

Shaun Fu

A version of this article appeared in the print edition of The Straits Times on August 13, 2016, with the headline 'Relook banks' unilateral right to debit funds'. Print Edition | Subscribe