Banks differ on scam transactions

Customers are advised to scrutinize their bank statements. /Marianne Pretorius
Customers are advised to scrutinize their bank statements. /Marianne Pretorius

South Africa's four big banks each have a different method of resolving unauthorised debit orders.

Doug Hardie, head of client services and risk at Nedbank Retail Banking, said it was the client's duty to put a stop to payments on disputed amounts and then approach the service provider to block them.

"Unfortunately, the bank has no way of cancelling these debit order instructions and the client needs to take this up with the service provider."

He said with regards to recent reports of industry-wide unauthorised debit orders, Nedbank encouraged clients to check their bank statements regularly and report any anomalies to the bank as soon as these were detected to stop further occurrences.

Hardie said they rely on the client to notify the bank of these unauthorised transactions, and to place a stop payment at branches or through other channels available.

He said if a client can demonstrate that the debit order was fraudulent, Nedbank will reverse the related fees.

"Each case will be viewed according to its merit."

Sibusiso Ngwenya, the head of pricing at Absa, said banks have started taking action against users who submit fraudulent debit orders, with two successful convictions thus far.

New system to regulate debits

The Payment Association of South Africa (Pasa) will be implementing a system that will minimise unauthorised debit orders.

DebiCheck, the system that will go out to all major banks, will have customers confirm all debit orders when a new contract is signed and consent is verified.

"This will minimise the margin for error and we hope [it] will go a long way to minimise unauthorised debit orders," Ombudsman for Banking Services Reana Steyn said.

By October 2019, Pasa will allow account holders to authenticate new debit orders before they are processed through the banks.

By 2015, Absa clients were able to personally reverse unauthorised debit orders at any time by logging on to Absa internet banking.

Absa does not charge for disputes made online and reverses any charges levied against their clients if their investigations reveal the client did not authorise a debit order.

Kuben Chetty, head of the transactional, savings and investment products for personal and business banking at Standard Bank, said they do not charge customers to dispute and stop unauthorised debit orders if they do so within 40 days. This is irrespective of the amount of the debit order and the channel used to dispute and stop the unauthorised debit order, he said.

Chetty said they only charge a customer R290 if a dispute is raised after 40 days.

"If it turns out that there is not a valid mandate in place, the fee will be not be charged."

Standard Bank clients were also expected to go to their branches to cancel or reverse the disputed debit orders.

FNB was recently reported as saying it had waived its fee for stopping unauthorised debit orders of less than R200. It did so to clamp down on this practice and to empower its clients, said Ryan Prozesky, the chief executive of FNB consumer core banking.

All four banks said it was the customer's duty to check their bank statements for any unauthorised debit orders and to report it.

Those found to be processing illegal debit orders would have their services terminated by the banks after their conduct was reported to the Payments Association of SA.

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