Picture: Bloomberg

FIRST National Bank (FNB) announced this week that is waiving the fee for stopping unauthorised debit orders through its electronic banking channels and is clamping down on business customers who facilitate unauthorised collections.

Ryan Prozesky, the chief executive of FNB Consumer Core Banking, says: “Customers will no longer be charged for stopping unauthorised debit orders of less than R200 through the FNB app, online banking and USSD for those who do not have access to the internet and smartphones.

“Furthermore, the bank is monitoring and analysing non-FNB businesses that are processing illegal debit orders on FNB customers’ accounts, while taking steps to curb such activity among its business clients.”

The bank says those found to be processing illegal debit orders will be reported to the Payments Association of South Africa (Pasa), and the bank will eventually terminate their services. 

FNB customers are notified via SMS whenever a debit order is raised on their accounts for the first time, as well as the amount and the service provider’s name. If they believe the debit order is unauthorised, they can stop, dispute or reverse it.

Fraudulent debit fraudsters are rife in South Africa. One of the reasonsfor this fraud is that most people don’t check their bank statement, which is where fraudsters pounce on unsuspecting consumers.FNB also says it has a warning system that alerts customers, through SMS or app notifications, of suspicious debit orders that are currently running. 

Furthermore, FNB app-registered InContact users receive alerts for all transactions, regardless of the amount.

Donovan Marais, the channel manager at Sage Pay, says Pasa has proposed tough new rules that aim to clamp down on debit order fraud.

“Often, fraud takes the form of a dishonest company debiting a small, unauthorised amount of between R50 and R100 from a customer’s account. The rationale is that the customer won’t notice, and if he does, it’s easy enough to reverse the charge without the customer taking the matter further.”

Sibusiso Ngwenya, the head of pricing at Absa Consumer Banking, says Absa customers can view debit orders processed against their accounts via internet banking.

Customers can, via internet banking or at a branch, dispute a debit order within 40 days of the date on which it was presented. 

Once disputed, the debit order will be reversed, and the customer will receive their money back instantly. Ngwenya says disputing a debit order online does not attract any fees.

“It’s important to remind your readers that disputing an authorised debit order is potentially an infringement of the terms and conditions they have entered into with the service provider,” Ngwenya says. “It could result in the suspension of service and or legal/collections action. Customers should, therefore, make very sure which debit orders they’ve authorised and which they have not.

“Absa is a fully compliant participant of the DebiCheck programme. From July 28, all new debit orders will have to be compliant with the new DebiCheck standards,” Ngwenya says.

Absa’s fees for disputing a debit order that has already been processed are:

• Via internet banking within 40 days: free;

• At a branch within 40 days: R30; and

• At a branch after 40 days: R145.

Absa’s fees for stopping a debit order that has yet to be processed are:

• Via internet banking: R30; and

• At a branch: R60.

The banks say you should report companies involved in unauthorised debit orders to Pasa by emailing [email protected] or phoning 010 140 7100. 

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