Real con­trol over your debit orders still out of your hands un­til next year

Sunday Times - - Money - By FADIA SALIE

● South Africans will have to live longer with debit or­der abuse due to the Re­serve Bank’s post­pone­ment of the im­ple­men­ta­tion date for De­biCheck — a new way of con­firm­ing debit orders with you once off be­fore they are pro­cessed by your bank.

The Re­serve Bank last month pub­lished in the Gov­ern­ment Gazette that the new im­ple­men­ta­tion date for De­biCheck, also known as Au­then­ti­cated Col­lec­tions, will now be Oc­to­ber 31 this year in­stead of the end of this month, and the new sun­set date for the ter­mi­na­tion of all old debit orders — or non-De­biCheck orders — is now Oc­to­ber 31 next year.

This means that from Novem­ber this year, no new debit orders will be pro­cessed early un­less they are De­biCheck debit orders.

An early debit or­der (EDO) is pro­cessed ear­lier in the day than a nor­mal debit or­der and has a “credit check­ing” fea­ture, which means that as soon as money is de­posited in your ac­count it trig­gers a debit.

And from Novem­ber next year all debit orders — in­clud­ing those al­ready on your ac­count — must be De­biCheck debit orders.

In other words, un­til Novem­ber 2020 there’s not much you can do to pre­vent a third party that has ac­cess to your bank ac­count num­ber from plac­ing a debit or­der on your ac­count with­out your con­sent.

Work on De­biCheck started in 2013 af­ter a spike in fraud­u­lent debit orders. Late last year hun­dreds of thou­sands of con­sumers were vic­tims of a R99 debit or­der scam.

De­biCheck will en­sure no debit or­der is paid un­less you have con­firmed that you wish to pay the ser­vice provider a cer­tain amount from your ac­count and aims to stamp out rogue debit orders — those be­ing pro­cessed to your bank ac­counts with­out your con­sent — and put a stop to con­sumers dis­put­ing valid debit orders.

Ac­cord­ing to a di­rec­tive is­sued by the Re­serve Bank, an in-depth in­ves­ti­ga­tion into early debit orders iden­ti­fied var­i­ous is­sues, in both the Au­then­ti­cated Early Debit Or­der and the Non-Au­then­ti­cated Early Debit Or­der sys­tems.

These is­sues spread across the pay­ment sys­tem value chain from the cus­tomer who au­tho­rises the debit (payer) through to the col­lec­tor (user), sys­tem op­er­a­tors, spon­sor­ing and ac­quir­ing banks.

Wal­ter Volker, CEO of the Pay­ments As­so­ci­a­tion of SA (Pasa), says a “tremen­dous ef­fort” has been made by the pay­ments in­dus­try — from the SARB to the banks, Pasa and user asso­ciations, such as in­sur­ance com­pa­nies and lenders — to iden­tify and ad­dress gaps and weak­nesses in the sys­tem.

“In the process of do­ing so, due process has to be fol­lowed, and we have to en­sure that any neg­a­tive con­sumer im­pacts are min­imised, es­pe­cially be­cause for 99% of con­sumers the debit or­der sys­tem works very well, is re­li­able and cost ef­fec­tive.”

Volker says the im­ple­men­ta­tion date had to be post­poned mainly due to more com­plex IT and busi­ness pro­cesses than orig­i­nally en­vis­aged.

“De­biCheck is unique in the world, so we had to de­sign, build and im­ple­ment some­thing that has never been done any­where else,” he said.

Al­though 11 of the banks are us­ing De­biCheck, and some have done so since Au­gust last year, they have ex­pe­ri­enced on­go­ing sys­tems in­sta­bil­ity.

A third chal­lenge is to en­sure con­sumer aware­ness and un­der­stand­ing of the new ser­vice and the process that is nec­es­sary to en­sure a suc­cess­ful man­date reg­is­tra­tion. “This can only re­ally be done on a mas­sive scale when the first two el­e­ments have reached a min­i­mum level of sta­bil­ity and adop­tion.”

Volker is con­fi­dent the in­dus­try will reach this point in the first quar­ter of this year, in­clud­ing in­creased lev­els of aware­ness.

“We are also in proof of con­cept stage with re­gard to a new debit or­der dis­pute process, which will hope­fully pro­vide the banks and Pasa with more for­mal feed­back in the event of il­le­gal de­duc­tions [and] will be of the na­ture and qual­ity to be us­able in a court of law so that we can achieve suc­cess­ful crim­i­nal pros­e­cu­tions of rogue users.

“This is some­thing that we are find­ing dif­fi­culty in achiev­ing with the cur­rent dis­pute process.”

At Pasa’s con­fer­ence in Au­gust, Volker said all en­ti­ties that debit your ac­count will have to adopt De­biCheck. Pasa will have to sign on these users, such as call cen­tres, in­sur­ance com­pa­nies and mi­crolen­ders, of which there are 4,600, he told the con­fer­ence.

What are the banks do­ing? Fran­cois Viviers, the ex­ec­u­tive head of mar­ket­ing and com­mu­ni­ca­tions at Capitec, says the oc­cur­rence of debit or­der scams is a bank­ing in­dus­try chal­lenge which is be­ing taken se­ri­ously.

“All the banks are work­ing with Pasa to curb the prob­lem. De­biCheck is one of the so­lu­tions that will help pre­vent this fraud from tak­ing place.

“We are fo­cus­ing on cre­at­ing aware­ness with clients to re­view and dis­pute po­ten­tial fraud­u­lent debit orders on the app or at a branch. The debit or­der orig­i­na­tors are then in­ves­ti­gated and re­ferred to Pasa if the bank sus­pects fraud.”

When debit orders are found to be fraud­u­lent, the amounts deb­ited and fees in­curred by the clients are re­funded, he says.

Ul­rich Janse van Rens­burg, the head of fraud strat­egy at the Absa Group, says Absa has not seen an in­crease in unau­tho­rised debit orders, but is aware of in­dus­try spikes.

Both Absa and Capitec have in­tro­duced alert no­ti­fi­ca­tions for trans­ac­tions un­der R100, as fraud­u­lent debit or­der orig­i­na­tors typ­i­cally sub­mit debit orders for less than R99 as this is nor­mally be­low the SMS no­ti­fi­ca­tion thresh­old and there­fore does not at­tract as much at­ten­tion.

“Absa No­ti­fyMe cus­tomers are no­ti­fied of all trans­ac­tions pro­cessed against their ac­counts re­gard­less of the amount, which is why we have a much lower preva­lence of the R99 scam,” says Janse van Rens­burg.

Last month, Capitec re­duced the min­i­mum value that trig­gers an SMS no­ti­fi­ca­tion from R100 to R30.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.