Customers sue bank over frozen accounts

KUALA LUMPUR: A group of 12 customers are suing CIMB Bank Bhd and CIMB Bank Islamic Bhd after their accounts were frozen owing to a system glitch.

The group filed the writ of summons through Messrs Nazmi Zaini Chambers at the Kuala Lumpur High Court registry on Monday (Feb 28).

They named the two entities as the first and second defendants respectively.

The 12 plaintiffs are Ahmad Sharil Nor Rasit, Azwani Aziz, Nor Amirah Suria, Nor Sazliana Sazali, Mukmin Mohd Ibrahim, Siti Roziana Abdullah, Muhamad Haris Fadhillah Yaacob, Muhammad Azizi Aziz, Muhammad Azizul Aziz; and three companies, Ai Smart Perfect Services, Ai Smart PS Trade and Harmonian Altra Trading.

In the statement of claim sighted by The Star, the plaintiffs said between Jan 26 and 28, they were made aware that their accounts have been frozen or earmarked by the defendants.

Between Jan 31 and Feb 4, the plaintiffs contacted the defendants' branches for clarification.

They claimed to have been either collectively or individually informed: that they were suspected of being involved in illicit or suspicious activities through transactions involving the accounts and the freeze was imposed for the purpose of further investigations; that the amounts frozen or earmarked were part of the floating transaction pending clearance of the transaction to the bank accounts; and that the defendants' online banking system was in the process of technical maintenance.

"According to the defendants, the accounts' processing errors were due to the negligence of the third party financial remittance service which led to double crediting errors into the accounts," the plaintiffs said.

The plaintiffs claimed their accounts were frozen by the defendants for the purpose of debt recovery and repayment.

They claimed they had not been involved in, nor had they conducted, transactions that would allow their accounts to be frozen; and furthermore, that freezing their accounts without any reason stipulated under Clause 7 of the terms and conditions of their savings or current accounts amounted to a breach of contract between the defendants and the plaintiffs.

"At all material times, the defendants, as financial institutions, have the duty of care towards all customers and depositors including to ensure that transactions related to the accounts can be made," they stated.

They claimed they suffered and faced difficulties when they were unable to use their accounts.

On Feb 14, in a letter of demand (LOD) sent to the defendants, the plaintiffs demanded that their accounts be unfrozen and released from being earmarked by the defendants, as well as a written apology which would include an undertaking that the defendants shall not freeze or earmark their accounts.

In the LOD, they also sought monetary compensation of RM1mil for their hardships and difficulties endured due to the defendants' alleged breach of contract and negligence.

The defendants sent a reply to the LOD dated Feb 21 through Messrs Shearn Delamore & Co whereby they stated that – pursuant to Clause 12 of the Bank's Savings Account Terms and Conditions and Clause 14 of the Bank's Current Account Terms and Conditions – the bank has a right to exercise rights to debit or to offset erroneous credit from the plaintiffs' accounts; and to combine or consolidate their other accounts up to the amounts of the duplicate credits after giving the plaintiffs seven days' prior notice.

"However, the bank has for the time being, only placed an operational hold up to the amount of the duplicate credits as part of efforts to recover such duplicate credits and notified your clients (the plaintiffs) of the earmarking," the defendants said.

The plaintiffs are therefore seeking a declaration from the court that the terms and conditions pertaining to the savings and current accounts which provided the defendants with exclusive rights to freeze or earmark the accounts are not enforceable and have prejudiced them.

They want a specific performance order on the defendants to immediately discharge or unfreeze the accounts, an order for monetary damages due to breach of contract and duty of care, and exemplary damages.

The plaintiffs are also seeking reimbursement of their solicitors' costs amounting to RM10,800, cost of the legal action, and other reliefs deemed just and expedient by the court.

Case management has been fixed for March 15.

In an immediate response, the bank denied any allegations of breach levied against it and will defend its position.

"Notwithstanding this, and as we have emphasised previously, the bank remains committed to ensure a fair and managed resolution with affected customers," it said.

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