LOCAL lender Rizal Commercial Banking Corp. (RCBC) and credit-card issuer RCBC Bankard stand accused of a potentially costly fraud charges by a small Dutch merchant who has doggedly pursued the case for nearly 10 years.
The case for damages potentially costing the lender as much as $30 million, or P1.32 billion at the current rate of exchange, hears at a Los Angeles court starting today, Thursday.
The Dutch firm Verotel Merchant Services has complained of having been shortchanged allegedly by the Yuchengco Group of Companies duo by some $1.5 million, a claim that has ballooned to as much as $30 million at present.
RCBC and Bankard have denied the fraud charges and told regulators at the Philippine Stock Exchange the lawsuit was without merit.
Verotel has filed fraud and negligence claims against RCBC and Bankard in a Los Angeles Superior Court in the State of California for allegedly paying the wrong beneficiaries for credit card transactions happening from 2004 to 2006.
“The case is more than 3 years old and it involves common commercial Internet transactions that occurred over a decade ago. RCBC and Bankard have filed appropriate defenses, including the fact that the contract at issue was with a Filipino corporation, not a Netherlands company,” the bank said.
The jury trial in California will decide whether RCBC and Bankard have indeed acted fraudulently.
Verotel CEO Joost Zuurbier said they were $1.5 million short.
“Our claim, including interest and lawyer fees, has increased to $3.3 million in the last seven years. If the jury grants our fraud claim, the total damage for RCBC and Bankard may increase to over $30 million,” he said.
RCBC said the inflammatory language in Verotel’s press release, as well as the fact that it was issued on the eve of trial more than three years after the case was commenced, demonstrate that it is an extortive attempt by Verotel to secure a settlement.
“The statement in Verotel’s press release that the damages award in this case could reach $30 million is devoid of any factual or legal basis,” the bank said.