Unauthorised debit orders: what to do
Banking customers have reported a number of instances where the banks have processed unauthorised debits to their accounts.
According to complaints received by BusinessTech, banking customers of FNB, Nedbank and Absa have all confirmed amounts of up to R400 coming off of their accounts on a monthly basis, without consent.
Upon querying their bank (Nedbank), one MyBroadband member found that a debit had been done through payment and financial services company, Personalised Systems & Services (PS&S), which processes debit orders on behalf of other companies.
Nedbank said that, while it was aware of the debits against some clients’ accounts, it could not confirm that it was PS&S conducting them.
“We have been able to establish that the item against which the debits are made are being presented by another South African bank, collecting on behalf of their client.”
Nedbank assured that it had voice-validated clients giving permission for the transaction to take place.
PS&S has been taken to task over similar issues from as early as May 2013, according to the complaints listing on HelloPeter.com – with over 30 complaints listed describing the same process, involving clients of Nedbank, Absa and FNB.
Speaking on the matter affecting its clients, FNB noted that clients could have been hit by fraudulent debit orders by companies obtaining customer account information in various ways.
“One such a way includes instances where account information is obtained illegally, without the customer having an agreement in place to process the debit order through their accounts.”
According to Ilse Smuts, marketing head for FNB core banking, while the bank could not finger PS&S directly, it has been fielding queries about debit orders from companies, and have been assisting the customers who have raised concerns around the debit orders that have gone off their accounts.
Absa indicated that PS&S is not serviced by the bank, but “some queries relating to the user have been forwarded to the relevant sponsoring bank”.
“When collectors who have been identified to have submitted [unauthorised] transactions, the sponsoring bank can, and in many instances does, terminate their services with that collector,” Absa said.
“There are unfortunately individual rogue entities facilitated through legitimate debit order bureaus, serviced by the banks, who present debit orders that are not properly [authorised].”
Nedbank
PS&S responds
PS&S is a company that handles debit order processes on behalf of clients, and thus is not the company directly responsible for the order.
“Just to put this in perspective, there are in excess of 50 million debit order transaction processed throughout the country every month,” said PS&S non-executive chairman, Fred Steffers.
According to Steffers, many consumers are not aware that when they speak to telesales people, they could potentially be authorising a debit order over the phone.
Steffers noted that, while the company has a quality control system in place that does random spot checks on debit order instructions, due to the shear volumes of orders, it is not able to check as many as it would like.
In response to many of the complaints listed on HelloPeter, PS&S operations manager, Petrus Grobler noted that audits are done to ensure that debit orders are done correctly, but some errors can’t be blocked, such as typos.
Grobler also promised that customers would be assisted to have orders refunded, accounts blocked against further debits by that company and re-evaluate the client’s security.
What can you do?
According to PS&S, consumers have the right to dispute any deduction that they believe was unauthorised or incorrectly deducted from their Bank account.
“I believe the consumer should contact the business or person that instructed the withdrawal of money from their account (i.e. originating company). Here they should declare a dispute and request a refund of their money,” Steffers said.
If unsuccessful, the consumer could approach their bank to dispute the debit order and request the bank to reverse it.
When questioned on what banking customers should do in the event of an unauthorised transaction going through, the gave the following courses of action:
- Absa: customers must report to a branch where an instruction for the reversal of the debit and blocking of future debit orders can be enforced.
- FNB: report the unauthorised payment online, or at an FNB branch, to stop and reverse the payment
- Nedbank: did not provide a course of action to be taken, but indicated that it would investigate any claims of unauthorised payments taking place.
According to PS&S, in the event that the questionable debit order was processed through a company like PS&S, it will be able to provide the details of the company that issued the order.
“If we processed the debit order, we will be able to furnish the consumer with the Name of the Institution that instructed us to debit their account as well as all their contact details and the reference number relating to the transaction,” Steffers said.
“We have a zero tolerance approach to processing debit orders without authorisation, if we find one of our clients guilty of this practise we would suspend them without any further questions asked,” he said.
- PS&S advises customers impacted by apparent debit order fraud related to them to contact them on 012 663 5662
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