Bank ‘took law into own hands’

A Magistrates Court yesterday described HSBC Bank Malta plc’s actions in recovering money from a client as abhorrent and tantamount to criminal misappropriation.

Paul Cauchi claimed the bank had, without authorisation, taken €4,197 from his account to make good for amounts due on a Visa credit card issued to third parties.

In his application Mr Cauchi said the credit card had been issued to him, as representative of Middle East Consulting Services Ltd, in 1999. The card was issued at the insistence of Alfred Apps who was the company’s owner. Mr Cauchi’s use of the credit card was limited to official work on behalf of the company.

When HSBC acquired Mid-Med Bank Ltd, Mr Cauchi was requested by Mr Apps to complete documentation in connection with a Visa credit card. The document stipulated that Mr Cauchi was jointly responsible towards the bank, with the company, for this card.

However, the bank had insisted that Mr Cauchi was to make good for another credit card bearing a different number. When Mr Cauchi contested this decision, the bank had, unilaterally in 2006, deducted the sum of €4,197 from Mr Cauchi’s personal account to make good for the sums owed on the credit card which did not pertain to him.

Magistrate Silvio Meli declared that the bank had used its position to prejudice Mr Cauchi’s rights. The bank’s claim that it could, unilaterally and without giving advance notice, take property belonging to a third party was contrary to all principles of good faith and was tantamount to criminal misappropriation, said the court.

The bank had taken the law into its hands in a manner which was abhorrent to the principles of law.

The court ordered HSBC to refund the sum of €4,917 to Mr Cauchi together with interest from August 2006.