The High Court has ordered Stanbic Bank to pay a total of Shs 7.5 million to a client over unauthorized transactions conducted on his bank account.
In May 2022, David Onyango sued Stanbic Bank, seeking a declaration that a series of debit transactions amounting to USD 2,459.15 (Shs 8.8 million) were illegally conducted on his account. He also accused the bank of negligence in handling his account, which resulted in financial loss.
Onyango further requested a refund of the full amount, in addition to exemplary and general damages, interest, and the costs of the suit.
According to court records, the disputed transactions occurred on June 11, 2021, when unauthorized withdrawals were made using Point of Sale machines and ATMs at various locations. Onyango was contacted by a bank agent on the same day to verify the transactions. He confirmed that he had not authorized them and immediately requested the bank to block his ATM card and cancel the transactions.
However, Onyango alleged that Stanbic Bank negligently—or intentionally—failed to act on his request. Despite lodging a formal complaint with the bank on July 10, 2021, the unauthorized transactions had already been processed, causing him a financial loss of USD 2,459.15.
In its defense, Stanbic Bank argued that by the time Onyango’s ATM card was blocked, the unauthorized transactions had already been completed. Following an internal investigation, the bank informed Onyango that all the disputed transactions were processed using his Visa debit card, which had been read by chip readers at various merchant terminals.
Initially, Nakawa Magistrate Frank Namanya ruled in Onyango’s favor, ordering Stanbic Bank to refund the full amount of USD 2,459.15 (Shs 8.8 million) and pay an additional Shs 1 million in general damages. The bank appealed the decision.
In her judgment on appeal, Justice Patience Rubagumya partially allowed the appeal. She held that while banks are obliged to honor transactions made using the correct card and PIN prior to any notification of suspicious activity, Stanbic Bank had breached its fiduciary duty by failing to verify and block the card after being alerted to the issue.
As a result, the court reduced the refund to USD 1,809.25 (Shs 6.5 million), limiting it to transactions that occurred after Onyango had notified the bank. However, it upheld the award of Shs 1 million in general damages.
“The Onyango is awarded general damages of Shs 1 million. Each party shall bear their own costs of this appeal,” Justice Rubagumya ruled.
