Financial fitness
Get on top of dubious debit orders
Unauthorised debit orders can cost you a lot of money so it is important to be aware of where the money in your bank account goes.
According to the Ombudsman for Banking Services (OBS), unauthorised debit orders are becoming an area of concern.
“The office is seeing an increasing volume of complaints related to unauthorised debit orders. What is really disturbing is the loss of income to banking customers and the emotional turmoil that it causes,” said the OBS.
It advised people to start checking their bank statements and make sure they understand all the transactions.
“Make sure you authorised all the debit transactions that reflect as minus numbers,” stressed the OBS.
It pointed out that an unauthorised debit order constituted fraud.
“If you suspect any unlawful transactions you should contact your bank immediately. The bank will be able to lodge a query by tracking the reference number recorded next to the transaction. All legal entities must comply with the rules set out by the Payments Association of South Africa, the organisation that determines the guidelines for service providers to collect monies via debit order,” said the OBS.
DebiCheck is a new system that will be implemented in all the major banks which will process all debit orders. The agreement will be confirmed when a person signs a new contract and verifies their consent. It is thought that this will minimise the margin for error and help deal with unauthorised debit orders.
“Collectively banks in South Africa process millions of disputes per month,” said the OBS.
When a dispute is raised and it is determined that the debit order was unauthorised, it is reversed. Ideally the dispute must be logged with the bank within 40 days of the transaction.
“However, you cannot put a stop to debit orders because your budget is suddenly under pressure. You have to give your bank reasonable warning to change the debit order. If your bank objects, you may have recourse with the OBS. It will conduct a full investigation of both parties and determine an outcome,” it added.
The services provided by the OBS are free of charge.