FNB in hot water for unlawful debits

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Durban - FNB could face thousands of legal cases and sanctions after it unlawfully removed hundreds of thousands of rand from thousands of bank accounts across South Africa this weekend in what has been described by a Durban businessman as “a bloody disgrace”.

Since May, a computer glitch has seen thousands of bank accounts – mainly with Absa Bank – being credited twice with “real-time deposits” by FNB.

It appears FNB did not pick up or remedy the double deposits immediately, because on Friday afternoon the bank passed “a huge volume” of debit order instructions for 7 000 bank accounts (mainly with Absa) in an attempt to get the money back.

The chief executive of the Payment Association of South Africa, Walter Volker, confirmed that the 37 000 transactions were in breach of the National Payment System Act and once the full extent and gravity of the breach were known, FNB would be sanctioned.

Volker said the association had received a preliminary report from FNB that showed a “few thousand” customers of “at least two banks” were affected.

“We will have the full report on Monday,” he said.

The money had been removed from accounts in the wrong manner, Volker said, and those affected should contact their own banks to discuss their options.

Three Durban businessmen, who asked not to be named, alerted The Mercury to the withdrawals from their Absa accounts that ranged from R1 400 and R17 000, to a double withdrawal of R25 000 from one account.

“It’s all very well if the person had money in the bank. But what if they didn’t? Surely in normal business practice FNB should have discussed this with those who received the double deposits, provided them (with) proof of the transaction and then discussed how the money could be recouped? It’s a bloody disgrace,” said one.

Another of the businessmen said when he asked for a record of the transaction it was dated May 31, 2012.

“When I looked it up there was a double credit, but I thought my customer had paid me twice, so I credited him with the money. I don’t have it any more,” he said.

Farren Roper, the head of FNB’s business operations, said: “We noted a small batch of double payments being processed when our customers made once-off payments using the bank’s real-time clearing option. The customers making the payments were not negatively impacted by this (the debit order withdrawals), as any excess funds were not drawn from their accounts.

“The (Absa and other bank) beneficiaries, however, would have noted a double payment. FNB is reversing these excess payments from the beneficiaries,” he said.

In an e-mail sent to one of the businessmen, Karen Botes, the client management head at FNB Online, said: “We agree that the method we have deployed to recover the funds was not ideal. We had hoped to find another option, but as we did not have the contact details of the recipients, we were not left with many options to follow.”

Botes apologised on behalf of FNB for the “impact of the system issue on your operations and the means chosen to recover this matter”.

On Tuesday night, on a national radio station, FNB’s Leanne van Zyl said because the transactions had been a banking error, the bank believed “it was fully acceptable to put them through the accounts”. Van Zyl said the double debits had occurred over months.

In a statement, Arrie Rautenbach from Absa Bank, said: “On Friday night March 15 FNB submitted a series of debit order instructions to Absa as part of their routine nightly interbank payment instructions.

“These files were duly executed… Subsequently it has become apparent that some of these FNB instructions had not been authorised by Absa customers.

“The FNB error has led to customer inconvenience and may result in customers’ accounts being overdrawn. Customers must please note that the submission of unauthorised debit orders is a contravention of the rules of the Payment Association of South Africa,” the e-mail said.

On the same national radio programme on Tuesday night, Rautenbach said the bank first noticed something was amiss when its call centres received a high volume of calls on Saturday morning.

“Can you imagine all these folk out happily shopping and suddenly their cards wouldn’t work?”

Rautenbach reminded customers “of their rights to dispute a debit order should they feel it is unauthorised”.

Kershia Singh, from Standard Bank, said the bank was working with FNB to establish the number of customers affected.

[email protected]

The Mercury


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