Dormant account puts man in debt
When opening a business account make sure that you are able to fund the charges that the bank will bill you to have it running.
Oupa Papo, 45, is very disappointed about the accumulating charges that have been levied against his dormant account which he opened for business purposes last year.
Papo, of Ekurhuleni, said his business was new and has not earned any income as he has not started on any projects he hoped to work on to generate income.
"Without any letters of demand or a reminder from Absa Bank, I'm now getting telephone calls representing them and claiming that I should pay R1,500 that has been accumulating since the account was opened," Papo said.
"Tell me where will I get the money while the company is new?"
However, Absa managing executive Oscar Siziba said the bank was within its right to charge him a minimum fee of R80 per month on the business account he opened.
Siziba said the account would accumulate charges on a monthly basis with a monthly service fee whether the account was used or not.
He said this information was normally communicated during the account opening process with the client.
"If the account is not funded and it goes to an excess, it accumulates more charges which makes it difficult for clients if the business is not operating yet," Siziba said.
In other words, these charges cannot be reversed and Papo is liable for them.
Siziba said when a business customer opens a new account, it was important to consider the nature and phase of the business, the types of transactions the business will be conducting as well as the functionality required.
He said a start-up like that of Papo, that only expected to generate revenue at a later stage, and that needed basic transactional capability would need a different type of
account compared to an established business with sophisticated requirements.
He said at the inception, the customer's unique requirements should inform the decision around the type of business account and the associated pricing and benefit options.
Siziba further said consumers choose the account that best suited their needs and agree to the fees in writing.
"It is important to note that even if a business does not have an income yet, monthly service fees will still be payable."
Siziba said further: "Absa's Classic Business has basic transactional functionality on a pay-as-you-go basis, which means you only pay for the transactional functionality you use."
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