BUSINESS SMS alert helps to keep customers in the loop about debit order abuse

FIRST National Bank has reported a “very positive response” to its debit order alert system introduced last month, which notifies customers of new debit orders on their accounts via SMS.

Debit order abuse has long been a headache for South Africans, who risk having money taken from their accounts without their permission. The alert system allows customers to dispute and reverse debit orders by replying to the SMS, or by logging on to one of the bank’s digital platforms.

FNB’s chief executive of value banking solutions, Ryan Prozesky, said yesterday most clients used cellphone banking to dispute orders.

“This is a very positive sign for us, as cellphone banking is available on all phones,” he said.

Announcing the service early last month, Prozesky said it was necessary because not all customers regularly checked bank accounts to weed out unauthorised debit orders.

“By immediately informing customers a debit order has taken place on their account – as well as the amount and the service provider name, customers can quickly act if they perceive the transaction to be unauthorised,” he said.

According to Walter Volker, chief executive of the Payments Association of South Africa ( Pasa), the country’s payments industry has been experiencing a “noticeable increase in debit order abuse”.

Pasa is an independent body, recognised by the SA Reserve Bank, that develops rules for payments.

It’s members include Absa, Standard Bank, Capitec, FirstRand, Nedbank, HSBC and Investec, among others.

“There are many scenarios where a company processes debit orders to a consumer’s bank account without a proper or valid mandate, no mandate or with an expired one,” Volker said earlier this year.

“In other instances, consumers request their banks to return debit orders which have already been paid.”

The association said debit orders to the value of at least R61 billion were processed each month in the country, more if early debit orders were included. Pasa, together with the SA Reserve Bank, is working on a plan called the Authenticated Collections Project to crack down on debit order fraud and to streamline payments. The project is similar, but separate from that introduced by FNB.

It will request customers to electronically confirm with their bank that new debit orders are legitimate before they are processed. The project is set to be rolled out in stages starting later this year.

jan.cronje@inl.co.za