FNB competition an unlawful lottery, court rules

First National Bank’s (FNB) “million-a-month account” competition is an illegal lottery, the Supreme Court of Appeal (SCA) ruled on Friday.

The SCA dismissed the bank’s appeal against a Pretoria High Court declaratory order, according to which the bank’s competition was a lottery prohibited by the Lotteries Act.

The R100 that depositors had to put into a 32-day notice account to stand a chance of winning R1-million was a wager, and the scheme thus constituted an illegal lottery, according to a media summary of the judgement.

The court rejected the bank’s argument that because depositors were entitled, upon expiry of 32 days, to the return in full of the money deposited, there was no potential loss to the depositor and thus nothing was given to the bank in return for the chance to win a prize.

In a statement the bank assured its million-a-month depositors that their savings were guaranteed and available at one day’s notice until May 15—should they wish to claim them.

The remaining accounts would be automatically transferred to a 32-day interest plus notice account, said the bank’s CEO of savings and investment products, Robert Keip.

“The bank noted with interest the fact that the court stated in its judgement that: ‘The National Lottery has a monopoly on collecting money from the general public in this way’.”

The bank launched the million-a-month account in 2005 and it produced 36 millionaires.—Sapa