# General Business Category > General Business Forum > [Question] Liability when scammed ?

## HAGGIS

Good day to you all.
I 'm new to this forum, the reason I joined is I hope to get some advice on what could be a costly situation, so thanks to all in advance.

My wife is the secretary at a small private school. She has worked at this school almost since its inception about ten years ago and has an impeccable work record. Recently she got scammed with the Telkom refund scam. The amount involved is quite substantial, R57 000.00. Like me and I'm sure many others, she was not aware that money showing her account was not necessarily hers yet. The money reflected in the school's account for several days before she was persuaded into "returning" it. The school had just signed an ADSL contract with Telkom (1 week earlier) and had recently moved about R100 000.00 rand into their transacting account to pay for a new classroom. These issues are maybe coincidental, but had that money not been there she would not have been able to transact on the "incorrectly" deposited R57 000.00 and had they not just signed a debit order with Telkom she may have been a little more suspicious of the incorrect deposit.

Her school board have charged her with gross negligence and have told her she must personally pay back the money.  I believe she is the victim of a scam perpetrated by organised criminals. Would the science teacher have to buy new equipment if the lab robbed?

My question is - what is the legal take on this?

Be honest with me, even if it's brutal. Thanks.

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## Dave A

Eish!

Personally, I recommend you hire a lawyer a.s.a.p.

I've tossed this one round the office and we've debated various scenarios.

The question ultimately boils down to whether the school may hold your wife responsible *and* accountable. And there are quite a few variables in that.

What is really p'ing me off about this scam is that FICA is supposed to ensure scammers can't get away with this stunt because the owner of the recipient account is traceable :rant:

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## Yvonne

I heard this had happened to an associate but on a S.A.R.S. Vat refund, not Telkom, and they had information which could only have come directly from the S.A.R.S. office.  Her company was seeking her dismissal, I will try to find out the outcome of her case and let you know.

As far as I know, only if the employment contract has a clause under which , in the evidence of neglect resulting in damage and costs, could the company seek to recover costs incurred, but assume that this could only be after a full enquiry hearing and neglect would have to be proven.

Question, as an employee - is there any system installed that requires authorisation and confirmation of transfer of funds over a certain limit.
Did she do anything which is "against" procedure?

If the school "normally" trusts her to handle issues like this without any "due deligence" processess and procedures, I think it would be exceptionally hard for them to obtain a refund of the fraudulent funds, unless there is some strong evidence that she herself may be involved in the fraud.

According to recent labor news, the school would have to pursue a criminal charge against her, and only after evidence of any wrong doing, leading to a conviction, would they be able to pursue a disciplinary hearing seeking dismissal, let alone repayment.

The very, very sad part, is that no matter what the outcome is, her trusted postion, and her emotional well being at work is now destroyed.

The lack of ability to trust, given all these scams, is costing us all heavily!

Yvonne

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Dave A (22-Aug-08)

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## HAGGIS

Hi Dave.

Thanks for the reply. The school have totally sr*wed up in their disciplinary procedure, so we could probably have this thing blown away by the CCMA, but being a small community and the fact that my kids attend the school I would prefer to try solve this amicably. The school's lawyer suggested that they should try recover the money from ABSA as they had allowed a non fica compliant account to be opened and transacted on. Unfortunately one of the school's board members is upper management in our local ABSA so I think they skipped that option.

I was just wondering if there was a specific law regarding internet banking, fraud and liability in the workplace.

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## HAGGIS

Thanks Yvonne.

Do you mean that the school can not demand that she pay the money back, only the courts? Their disciplinary hearing was not a hearing, she was just invited along to be handed their verdict.

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## Yvonne

The school definitely cannot do that!  I am blown away, after all the publicity that CCMA judgement receive that employers can still make such elementary mistakes.

No, please don't misunderstand me, the very best advice you can be given is that you must seek legal advice, immediately.

SA Labour Guide
22 August 2008

www.labourguide.co.za 
info@labourguide.co.za 

Here is the article:

UNAVOIDABLE CONSEQUENCE WHERE CRIMINAL AND CIVIL PROCEEDINGS ARE INSTITUTED SIMULTANEOUSLY AGAINST EMPLOYEES 
DENNIS SIBUYI 
Theft, fraud, bribery and corruption are rife in the workplace which causes companies and organisations (âthe employerâ) to loose large sums of money. In these situations employers often find themselves with no choice but to take immediate action by suspending or dismissing the transgressing employee. 

Once the employee has been suspended or dismissed, the issue of the lawfulness of the suspension or dismissal of the employee will take its course through the CCMA and/or Labour Court should the employee challenge the employerâs decision.  After suspension or dismissal of the employee, the employer may need to lay criminal charges and/or institute civil proceedings against the employee to recover monies lost as a result of theft, fraud, bribery or corruption.

Should the employer decide to lay criminal charges and institute civil proceedings simultaneously, the dispute clause mechanism contained in the employment contract that governs the relationship between the employer and employee needs to be considered? In most instances, the dispute clause obliges the employer to refer the dispute for arbitration. 

The primary reason for having an arbitration clause as a dispute mechanism in the employment contract is to ensure that the proceedings are fast tracked and the dispute is adjudicated upon as soon as possible as opposed to the normal court process, which takes considerably longer. However, the employerâs wish to have the dispute adjudicated upon as soon as possible in order to recover the monies lost may be frustrated where there are pending criminal charges against the employee.

Our courts have, as a matter of principle, accepted that an employee is entitled to demand a stay of arbitration proceedings where there are pending criminal charges against the same employee based on similar facts as are in the arbitration proceedings.

Procedurally, the employee is entitled to request the arbitrator to stay the arbitration proceedings pending the finalisation of the criminal proceedings. The employee has to show that the proceedings before the arbitrator stem from similar facts or evidence to be led in the pending criminal proceedings. The employee has to convince the arbitrator that if the arbitration proceedings are not stayed, he will be prejudiced in the conduct of his defence in the pending criminal proceedings. The employee will normally argue that he may be obliged to answer incriminating questions during the arbitration proceedings with may compromise his defence in the criminal proceedings. 

Once the employee has proved that the continuation of the arbitration proceedings will prejudice the conduct of his defence in the criminal proceedings, the arbitrator is obliged to stay the arbitration proceedings. In the circumstances, the employer has no choice, but to wait for the finalisation of the criminal proceedings which may take months or even years to finalise before the employer can continue with the arbitration proceedings. 

Unfortunately the above consequence is unavoidable where criminal and civil proceedings are instituted simultaneously against the employee and the employee demands a stay of the arbitration proceedings. In addition, the employer cannot choose to delay the laying of criminal charges solely to allow the arbitration to take its course in order to recover the monies lost. Employers have a statutory duty to report criminal offences committed in the workplace as soon as the employer becomes aware of the offence. 

The least the employer can do should it find itself in the above situation is to assist the State, where possible, in the prosecution of the employee in order to speed up the finalisation of the criminal proceedings. The employer may assist in the prosecution of the employee by making resources such as additional legal assistance available to the State, and for example preparing sworn statements of the crucial witnesses as well as liaising with the investigating officer and the prosecutor. In this manner, the criminal proceedings may be finalised as soon as possible which would the permit the resumption of arbitration proceedings.

Dennis Sibuyi is a senior associate at Bowman Gilfillan. 
Our appreciation to Bowman Gilfillan for permission to publish this article. 

For more information visit http://www.bowman.co.za 

This could have very serious repercussions for employers, as surely the employee would then be on full pay whilst on suspension pending the outcome of the criminal case?

Good Luck
Yvonne

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## Yvonne

Hello again,  In my haste to answer (and to get out the office!) I rushed my reply, realising now that it will be misunderstood.

The demand for the repayment of the funds - technically can be read that the school holds her liable and believes her to have committed some misconduct!  

Then they have to prove it!

Giving this article as an example of an "Extreme" case!  

I would believe that the schools employment contracts, responsibilities and accountability through the processes and procedures of her position, will play a big role in this matter.

If the school "trust" her in all these matters, and there is evidence of that, then I personally believe they will have a very hard time in recovering the finance and seeking any disciplinary action.
The phrase - "reasonable" plays a very large role!  

Seek legal advice, whatever the cost!

Yvonne

Yvonne

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## Dave A

> Do you mean that the school can not demand that she pay the money back, only the courts?


The school can *demand* all they like - it doesn't mean you are *required* to comply. Only a court can *order* your wife to pay the money.

Dismissal for gross negligence and recovery of lost funds are two totally different matters.

As Yvonne has pointed out, there are pretty complex good practice issues here too. Arguably and under certain circumstances, members of the Board/ the financial director of the Board/top management could be just as accountable, if not more so.

Don't be bullied. I hear you about the small town situation, but there has to be some sympathy for the position your wife has gotten into as well.

Who is the big bad wolf here?

EDIT: I think the situation referred to in post 6 relates to where there was criminal intent on the part of the employee. From the sounds of things - a rather different situation to this one. Here, the worst charges can be gross negligence and/or failing to comply with procedure.

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## Yvonne

Wow!  Surely ABSA are "compelled" to  fully investigate this and seek to trace the funds.

The very fact that someone has a connection to ABSA "demands" it - in my opinion, especially as your children are at the school, it is vital to ensure that no person has the ability to spread rumours - which will happen if she is compelled to pay back the finance.

Sadly, almost everyone has heard of these scams as they are so common, and the automatic assumption is, that general awareness would cause anyone to think very carefully about refunding overpayments from any source.

As a company we refuse to make refund for overpayment, with a waiting period of two weeks, and then I do not do a transfer, the company must make arrangements to fetch a cheque. This procedure is followed for any overpayment of more than R4,000
I demand a formal letter and a cancelled cheque to prove the bank details.

Some companies are annoyed at our policy, but most accept it, due to these scams.
This is what I mean by a formal procedure - does the school have one?


Yvonne



Yvonne

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## IanF

Haggis
I do not know enough to comment on the Labour side. But you say "The money reflected in the school's account for several days before she was persuaded into "returning" it" What worries me is normally these refund request cheques bounce quickly I have had it in 2 days. How did the 'bounce" only happen after the refund, is there not an accomplice at the school's bank as well. I would approach the school's bank then ask the banking ombudsman for advice.
I hope this can be settled amicably.

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## Dave A

> "The money reflected in the school's account for several days before she was persuaded into "returning" it" What worries me is normally these refund request cheques bounce quickly I have had it in 2 days.


A year or two ago I had one of these scam deposits only bounce after 8 days...

All agreed it was quite peculiar, and in that instance I never got the unpaid cheque sent to me too. It got "lost." Standard Bank apparently investigated, but as seems the way with these things, you never get to hear the results.

I've had one this month too. Just got the bad cheque in today with "Account not on file." Never heard of that before but at least the bounce reflected for the same day as the deposit.

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## geraldenek

I once had a laptop sold.  The guy deposited the money into my account, I transferred is from my cheque account to my credit card account the same day (assuming it was cash).  I then went and phoned the absa call centre to make sure that this money is cleared and that in no way this money could be returned.  The woman at absa promised, so i sent the parcel.

Only to find a week later when the bank phone, that it was a cheque, and it bounced.  My first question was, why was this cheque cleared immediately?  The bank informed me, that seeing that it was paid into my cheque account, and I’ve had it for quite a while, they automatically clear it on good standing, but it is still my responsibility to ensure that i wait 7 days.

Luckily for me I phoned the call centre, just told them, they can't misinform their clients.  Bank took my telephone bills to make sure of the exact date and time (because everything was recorded), I had to fill in a few forms, and they did an investigation.  2 months later, the money was back in my account.


Moral of the story : always wait 7 business days

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## Debbiedle

I would definitely hand this to a lawyer.

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## Ann Williams

I'm so sorry to hear about this scam. I posted a thread about what I think is the same Telkom scam  :Confused:  almost ten months ago (Telkom billing refund scam) and am  really nervous to see that this is still continuing all this time later.

Why I say so is that as soon as I was approached with this scam, hubby and I contacted the appropriate person at Telkom and told them about this in the hope that something would be done by them.

So my question here is whether Telkom have actually tried to do anything about this situation that is making their name 'gat'? (Would they be liable in any way? Just a thought....)

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## Dave A

I'm not at all sure how seriously the authorities are pursuing these scammers. And given we've had two attempts at our company the last 30 days (the Telkom refund one and the change of bank details one), I'm inclined to think scams are on the increase.

At this stage, the cure would seem to be inoculation by increasing awareness and vigilance. The sad part is if this is the kind of money the scammers manage to extract, they don't have to win too many for it to be a very viable enterprise.

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## HAGGIS

Thanks for all the comments everyone.

I'm sorry I haven't been keeping up with the posts, I was away in the bush for a while.

We saw our layer who has written to the school board, and have submitted the relevant papers to the CCMA. I suppose now we must just wait and see. What I am hoping is that the CCMA dismisses the verdict of gross negligence, because the schools disciplinary hearing was such a farce, then the school can't say she owes the money because she, in theory, was not negligent. Does that make sense ?

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## Yvonne

Haggis, Apologies for the long delay, I have been overseas for a few weeks.  

I said I knew of a similar case and managed to followed it up.
An acquaintance of my sister in law, (SARS refund supposedly - con - knew all the details therefore almost guaranteed as an inside informant!)

In her case she asked her boss what she should do, and he authorised her to make the transfer, but still felt she was responsible!

She had been advised that the company was considering taking disciplinary action against her, I have been told that the company had dropped the case, but don't know know the exact details.
After some months of trying to ride out the situation, she recently resigned as she said the entire working relationship had been adversly affected.  

My sister in law said that to the best of her understanding, no recovery through the banking system was made either, and nothing was ever heard regarding any investigation.

There have been a few cases of credit card fraud recently, when the credit card has not been out of the hands of the account holder!  

The banks give them "the absolute run around" and say that there is no proof that they did not draw the funds themselves!  

It seems as if our finance is definitely not secure.

My husband had to apply for a Nigerian visa, and the only way to apply is on line and payment made only with a credit card?  Scary stuff.

Yvonne

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