Standard Bank overcharged a client by R192,000 after illegally increasing the interest rate from prime minus 1.75% to prime in June 2009.
Before 2007, Standard Bank was regarded as one of the most reliable banks in South Africa. However, by 2009, it had become one of the most controversial institutions under the leadership of Chief Executive Officer Mr. Sim Tshabalala.
An article published by Media 24/Business on 19 March 2017, titled “Winning Women: Banking on Home Loans” (click here to read article), reported that Standard Bank had lost approximately R1 billion on its mortgage loan book in 2008. In response to these losses, Ms. Funeka Montjane was appointed as the Financial Director to Mr. Tshabalala. According to the article, she implemented what were described as “unconventional methods” in an effort to prevent further financial losses in the mortgage division.
These so-called unconventional methods were allegedly implemented from 1 June 2009 without the consent or knowledge of clients. They included the extension of loan terms from 20 to 30 years, the increase of agreed interest rates, the periodic increase of monthly service or administration fees, and the levying of unauthorised debits on client accounts.
When questioned in a detailed letter dated 2 October 2025, Standard Bank was informed that increasing the client’s interest rate constituted a contravention of Section 4 of the Usury Act, Act 73 of 1968 (as amended), which is a criminal offence. The bank responded in an email dated 9 October 2025, stating:
“The restructure on the account done in March 2009 was the client’s request for debt assistance which was provided to the client.”
However, Standard Bank was informed on the same day that the client never requested any debt assistance and was asked to provide either a written agreement or a transcript of the telephonic discussion as proof. At the time of this report, Standard Bank has not responded.
The matter is currently being referred to the National Financial Ombud Scheme (NFO) and the Commercial Crime Unit for investigation.