Nedback ‘held gun to my head’ over fees

(This article was published on 29 May 2016 in the Weekend Argus, a weekly newspaper published by Independent Media in Cape Town, Western Cape province.)

Written by Yazeed Kamaldien

A Nedbank client claims he is owed at least R600 000 after the bank told him it would no longer deduct insurance payments on his account but failed to do so.

Kariem Kagee, who owns two petrol stations in Cape Town, said a bank employee contacted him in early 2010 to say insurance payments on the cash handling of his accounts would no longer be deducted. He needed to get external insurance.


Kariem Kagee says Nedbank owes him thousands of Rands. The bank denies any wrongdoing. Picture Yazeed Kamaldien

Kagee claims the insurance was not cancelled though and he ended up paying dual insurance from that time until now.

Kagee also says the bank failed to inform follow up on his instruction to cancel the insurance as he had already obtained external insurance.

Nedbank denied any wrongdoing, claiming that Kagee should have cancelled his insurance contract with the bank.

Kagee blames the bank for telling him telephonically that the insurance would be cancelled but then doing following up on that.

“Cash handling is an expensive component of our business because we deal in cash daily. We pay an insurance fee for every R100 we deposit,” said Kagee.

“When I found out in 2011 they were still charging me insurance I went to the bank with my (external insurance) broker. Nedbank then said they would refund me 50% (of the payments already made). This was admitting they were wrong.

“My broker argued that I acted upon their instruction to get my own insurance and they should cover the whole 100%. There was a lot of two-and-fro and nothing came forth.”

Kagee adds: “I approached my attorney who wrote the bank a letter of demand. I had a meeting at the bank. They said I could not write a letter of demand because they were lending me money. They said they could take it away.

“It was like holding a gun to my head. It was like saying, ‘Leave this’. They gave me an overdraft facility and they told me at a meeting they would withdraw that. They forced me to back off.”

Kagee says “up till today they are stull charging me” insurance.

“We had several meetings. They just don’t want to listen,” he said.

Nedbank responded to Weekend Argus queries on this matter, saying the bank “aware of the case and have been trying to reach agreement on the matter for a number of years”.

“In April 2010 Nedbank contacted Mr Kagee and proposed the new product terms. The options presented required either a new contract containing the new terms be signed or the termination of the agreement.

“However, Mr Kagee refused the options mentioned and insisted that the insurance component remain exactly as per the contract he had signed… which meant his insurance cover remained as before.”

Nedbank said Kagee’s “cash deposit fees were therefore not reduced as no new agreement had been signed”.

It said Nedbank “advised that he would remain on the current risk cover offering, as he requested, until further notice”. Deductions continued on a “month-to-month basis… until a new agreement was entered”.

Nedbank said Kagee’s external insurance was also insufficient and “would have placed himself at significant risk of losses from theft”.

“The cover provided under the Nedbank agreement ensured he was protected from such threats,” said the bank.

Kagee is adamant his external insurance was sufficient, as he was advised by the broker, and said he wants a refund from Nedbank for the insurance it has charged him.

But Nedbank refuses to pay back any money since Kagee “has benefited from reduced financial risk as a consequence of a valid insurance contract”.

“It is the bank’s view that Mr Kagee does not have a basis for a refund of insurance premiums,” it said.

“Mr Kagee’s rights to contest any unfair treatment that he perceives in this matter are still available and may be directed at his own discretion to the office of the banking ombud or insurance ombud.”

Kagee said he would consider taking to the bank ombud to get back a full refund of all the money Nedbank had deducted from him for insurance payments.

“Nedbank continued to unlawfully enriched itself,” said Kagee.

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About Yazeed Kamaldien

Self-employed journalist and photographer from South Africa.

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