The Eastern Caribbean Central Bank (ECCB) is aware that on Monday, 29 April 2024, the Republic Bank (EC) Limited (Republic Bank) debited customers’ accounts as a result of delayed e-commerce and point-of-sale transactions.
As we understand the situation, the affected customers received value but the corresponding debits were not posted. We are informed that these transactions date as far back as 2022 when the system was converted following Republic Bank’s acquisition of the operations of Scotiabank.
We are advised that about 12,112 Republic Bank customers across five countries in the Eastern Caribbean Currency Union (ECCU) namely; Anguilla, Commonwealth of Dominica, Saint Christopher (St Kitts) and Nevis, Saint Lucia and Saint Vincent and the Grenadines, have been adversely impacted by this untimely situation. The affected customers include staff at the ECCB.
This situation is downright unsatisfactory. Without a doubt, it has caused hardship and anxiety for many customers. The customers of Republic Bank and the ECCB, as regulator, expect better from Republic Bank.
How should this situation be resolved?
The Role of Republic Bank
As a licensed financial institution, Republic Bank has an obligation to promptly debit the accounts of its customers for point of sale and e-commerce transactions. On this occasion, Republic Bank failed to meet its own standards, the ECCB Code of Conduct and customer expectations. It is incumbent on Republic Bank to work assiduously with its customers to fix it.
The ECCB has engaged Republic Bank on this issue, has sought, and received assurances about how this highly unsatisfactory situation will be addressed. Republic Bank has assured the ECCB that having regard to this unsatisfactory situation, it will offer customers:
1. Payment plans where needed and requested;
2. The reversal of any overdraft fees directly resulting from the delayed debits for the e-commerce and point-of-sale transactions posted;
3. No fees will be charged for standing orders to facilitate payments;
4. No commitment fees, legal fees or interest will be charged for customers who require credit facilities for payment of the delayed debit sums to their accounts; and
5. Customers who require bank statements to verify the accuracy of the amounts debited will be furnished with such statements, without charge.
The Role of the ECCB, the Regulator
The ECCB acknowledges the concerns of customers raised via social media and those who have directly contacted us. The ECCB has taken the issue very seriously. The ECCB is required to pursue the public interest within the confines of the Banking Act, 2015. The ECCB does not have the powers under the Banking Act to require Republic Bank to reverse these late debits except where they are inaccurate or fraudulent. In such instances, Republic Bank is required to so do immediately.
The current Banking Act provides the ECCB with very limited powers for market conduct (financial consumer protection). For example, the Code of Best Practice for Licensed Financial Institutions provides guidelines but they do not have the force of law.
The ECCB recognises the lack of consumer protection powers in the current Banking law. Consequently, the ECCB, in 2023, sought and secured the approval of the Monetary Council to change the law to provide such powers and to establish an Office of Financial Conduct and Inclusion. Work to affect this decision has commenced.
Pursuant to Section 60(7) of the Banking Act, 2015 the ECCB has advised Republic Bank of its decision to commission an independent audit of this situation. Based on these findings, the ECCB will determine if any additional actions are necessary.
The Role of Customers
The excessive delay in the posting of these transactions is aggravating but the action taken by Republic Bank is not statute-barred.
Customers who have been impacted by the late debiting of their accounts by Republic Bank are encouraged to do the following:
1. Check to ensure transactions posted and the sums debited are accurate;
2. Where there are instances of inaccuracies or fraud, these transactions should be reported promptly to Republic Bank for rectification;
3. Customers who require time to settle the late debits should immediately advise Republic Bank and request an appropriate time to settle and finalise those arrangements.
The ECCB remains resolute in its mandate to supervise all licensed financial institutions under the Banking Act, 2015 and is committed to ensuring financial stability in the ECCU.