Court Ruling - A ‘Certificate of Balance’ is not Adequate Proof of Debt

A recent ruling by the Pretoria High Court has highlighted the importance of transparency in bank debt claims. FirstRand Bank lost an appeal against Llewellyn and Ilana Reinecke, who challenged the accuracy of the arrears claimed on their R2.1 million loan.

The couple requested a breakdown of how the bank arrived at the claimed arrears, as they had not received bank statements since 2019. FirstRand relied on a “certificate of balance” (COB) as proof of debt but did not provide further details when asked. The court ruled in favour of the Reineckes, stating that a COB alone is not conclusive proof of debt and that banks must provide proper documentation when requested.

Do Not Accept the Bank’s Claims - Verify

• Clients receiving Section 129 Notices under the National Credit Act can demand a detailed breakdown of the arrears before accepting the bank’s claims.

• Banks must provide proof of debt, a COB is not enough—customers have the right to request statements and transaction details.

• Always verify the arrear figures. The court case showed inconsistent arrears figures in bank documents, reinforcing the need for careful review of debt claims.

• Alternative resolution options if a bank does not provide proper records, clients can escalate the matter to the ombud or other dispute resolution channels before going to court.

This court case highlights the importance of verifying debt claims before accepting liability, an area where accountants can play a critical role in guiding clients.

Source: Moneyweb article