CIMB Bank hauled to court over frozen accounts, processing error
Nine individuals and three companies have filed a lawsuit against CIMB Bank and CIMB Islamic Bank over the alleged breach of contract linked to the freezing of their accounts.
Through lawyers from law firm Nazmi Zaini Chambers, the 12 plaintiffs filed the writ of summons against the commercial bank.
Back on Feb 11, Bernama reported that...
Nine individuals and three companies have filed a lawsuit against CIMB Bank and CIMB Islamic Bank over the alleged breach of contract linked to the freezing of their accounts.
Through lawyers from law firm Nazmi Zaini Chambers, the 12 plaintiffs filed the writ of summons against the commercial bank.
Back on Feb 11, Bernama reported that Bank Negara Malaysia would take appropriate supervisory steps and action on CIMB Group Holdings Bhd if there had been any breach of legal or regulatory requirements regarding the bank’s recent processing error incident.
According to other news reports, CIMB claimed that a processing error in its banking system had resulted in a number of accounts being frozen, and the bank has been reaching out to the affected customers to ensure a fair and managed resolution.
Through the present civil action, the customers contended that the bank breached Clause 7 of the Terms and Conditions of their current accounts, which deals with Freezing of Account.
The customers claimed that at all material times, they have never been involved in or carried out any transactions that permitted the bank to freeze the accounts (the plaintiffs claimed they were made aware their accounts were frozen between Jan 26 and 28).
The plaintiffs alleged that between Jan 31 and Feb 4, they were informed by the bank’s various branches that they were suspected of involvement in illicit activities and the bank was investigating the matter.
They also contended that between Jan 31 and Feb 11, they received numerous text messages and phone calls from the bank branches notifying that the accounts are facing processing errors.
They claimed the bank told them that the processing errors were caused by the negligence of third-party financial remittance services, which led to double crediting errors in the accounts.
The customers alleged that the bank told them that the accounts were then frozen and/or earmarked for the purpose of debt recovery and repayment to the plaintiffs.
“The conduct of the defendants (CIMB Bank and CIMB Islamic Bank) in freezing and/or earmarking the accounts without any reason stipulated under Clause 7 of the Terms and Conditions, is a breach of contract that existed between the plaintiffs and defendants.
“In continuance of the freezing and/or earmarking the accounts by the defendants, the plaintiffs have suffered and were faced with difficulties when the plaintiffs are unable to utilise the accounts,” the nine individuals and three firms claimed.
Breaching duty of care
The plaintiffs contended that the bank breached its duty of care towards them by allowing negligent third-party money remittance services to affect the plaintiffs’ rights and standings as customers to the bank.
The customers contended that the bank failed to notify them that their transactions would be affected or interrupted due to the negligent third parties.
Through the civil action, the plaintiffs sought several court orders, among them for the bank to immediately discharge and unfreeze their accounts.
The customers also seek an order for the bank to pay monetary damages over the alleged breach of contract; exemplary damages; reimburse to the plaintiffs’ lawyers cost of RM10,800; the suit’s costs; and any further relief deemed fit by the court.
When contacted, the plaintiffs’ lawyer Nazmi Mohd Zaini confirmed that the lawsuit was filed at the Kuala Lumpur High Court yesterday.
The counsel said the cause papers have been served on the bank, and that the legal action is fixed for case management on March 15.
In a statement to Malaysiakini later this afternoon, CIMB Group refuted allegations raised by the lawsuit, reiterating that it is prepared to defend itself in court.
"CIMB Group denies 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 ensuring a fair and managed resolution with affected customers," it contended.
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