A man, only identified as VZ, is in serious financial trouble after spending more than R2.6 million on online gambling over just six days. He had a bank account with Investec Bank that came with a credit limit of R150,000, but because of a system error on the bank’s side, he was able to spend far more than his limit.
When the bank realized the problem, they demanded that VZ repay the money. VZ admitted he could not pay and instead blamed the bank, claiming they had been reckless in allowing him to access such a large amount of credit. Investec then went to the Western Cape High Court, asking the court to place VZ under provisional sequestration.
This is a legal process where someone’s finances are taken over and managed because they cannot pay their debts. The court agreed, finding that VZ was insolvent and that the only way for the bank to try to recover its money was through this process. VZ had originally opened a Private Bank Account with Investec, which included a credit limit of R150,000, and he agreed to the terms of this account.
In February of the previous year, Investec implemented an update to its internal system that accidentally disabled the function that checked account balances for tokenized transactions. Tokenized transactions allow payments to be made without using the physical card. Due to this error, the system allowed transactions to go through regardless of whether the client had enough money or had exceeded their limit.
VZ took advantage of this error and, over the next six days, made multiple online bets on gambling platforms, spending slightly more than R2.6 million. Each time he made a transaction, the bank sent him notifications alerting him of the charges, but he continued to place bets. A few days later, Investec instructed its attorneys to place him in default and demanded that he repay the full balance immediately so that his account would be brought back within the authorized limit of R150,000.
VZ did not deny the debt but said he could not pay the full amount immediately. He asked the bank to allow him to pay smaller portions and suggested settling the debt by April 2028. Investec rejected these proposals and went to court to have him sequestrated. In his defense, VZ argued under the National Credit Act (NCA) that the bank had failed to comply with the rules on lending and that the disputed debt was the result of unlawful credit extension. He denied being insolvent.
The court noted that the total debt of R2.6 million included his authorized credit limit of R150,000 and roughly R2.4 million in unauthorized charges. Even if the court accepted that VZ was not liable for the extra R2.4 million, he still owed the R150,000 that had been officially approved. His own proposal to pay off the debt by 2028 demonstrated that he could not pay immediately, which showed his insolvency.
The court also found that his claim of reckless lending by the bank was inconsistent with the fact that he had acknowledged his R150,000 limit and there had been no agreement to extend credit beyond that. The court concluded that VZ was unable to pay his debts, and because there was no legal agreement allowing him to spend millions beyond his credit limit, he was placed under provisional sequestration. This means that the court will now take control of his finances to protect the bank’s interests.
