DEBIT ORDERS AND ISP'S

C

Corr

Active Member
Joined
Aug 4, 2005
Messages
33
Reaction score
1
Location
Cape Town
I am writing on this forum because the insistence on payment by debit order is particularly relevant to the ISP industry (not only in S.A.). Very few consumers understand the risks involved to them or in fact even stand still one minute to consider this or other payment options, it's convenient......sure!

I am a retired Banker, have worked for many years in senior management positions, within the corporate & business sector and have a pretty thorough understanding of the risks involved and decided more then 15 years ago not to allow debit orders on my accounts if I can in any way help it. This is getting progressively more difficult and recently my ISP has told me that EFT is not an acceptable payment method so I now need to find another alternative.

In very simple terms, giving a company a debit order authority is like giving your wallet to the shopkeeper at the till and telling him to take what he want!

You don't do that do you?

When things go wrong, don't think you can communicate with your Bank to fix it.....I can't even talk with the Bank I've worked for all my life, so how are you going to do it?

A SHORT STORY
Some years ago I went overseas for a fairly long period and gave the City of Cape Town a temporary debit order authority. As Murphy will have it, shortly thereafter they decided that I owed them R10 000-00 for clearing a plot and debited my account together with the normal monthly services bill. Remember that those days that was still a lot of money and I was out of pocket and sitting in Europe!

So I phoned their call centre and was told that it was a mistake, they could see that, but they could not repay me, but if I filled in some forms and came to hand it to them, then they could consider, ....it would take about 6 weeks..........they had no suggestion about who was going to feed my children in the meantime. Luckily I know my way around such problems and ended up phoning the senior financial executive, wasting his time, and received my repayment within a week without any further hassle.

Please think before you hand your wallet to just anyone, or sign a debit order authority, it places a significant risk on your shoulders, you have rights as well and can negotiate.

Here is something I found with a quick search.

Take Care


http://www.brainstormmag.co.za/inde...=2211:who-hath-the-debit-order-hath-the-power

http://www.iol.co.za/blogs/wendy-kn...-debit-orders-go-wrong-1.1000633#.UtjLehCSxvA
 
Wow... Food for thought, seeing as how I have my first bank account for about a year now and I signed up for two debit orders this month...
 
Unfortunately, theft is rampant in Africa, and ISP's margins are low. If an ISP accepts credit cards, it generally gets defrauded. If the ISP waits for an EFT, the data and the client are generally gone by the time the EFT does not come. It's not fair for you to say people shouldn't sign debit orders.

SIGN DEBIT ORDERS. The little form has an amount, possibly a variance, and normally a description of the service and your signature. If the ISP decides to bill you R10000 because they broke their '.' key by mistake, no problem, the bank has a Naedo (non authorized electronic debit order) form, so from anywhere in the world you have your money back in 2 or 3 days. If you don't like the way the ISP handled the situation, the market is super competitive, find another one.

Next time an ISP declines your request to do an EFT, offer to pay a year in advance. They should accept that. The other option is to find a prepaid ISP.

I have heard of the ISP being ripped off far more often than the inverse. (While excluding the instances of the roaming shark - but "theoretically" again, that's consumer fault despite the fact that roaming is so overpriced it's a joke).

I do agree with your general debit order sentiment (and that the banking system is flawed), I myself prefer EFT, but if it's not a payment option, then it's not a payment option. The options are then find someone else, or suck it up.

EFT: In very simple terms if the ISP was a shopkeeper he just gave you a 2L milk and you will send the money later.
DO: In very simple terms, giving a company a debit order authority is like giving your wallet to the shopkeeper at the till and telling him to take what he want! - But if he takes the wrong amount the bank is legally required to return it.
 
Well, it is not smart to give anyone a blanket debit order like you did. You paid for your stupidity and now you want to advocate against the signing of debit orders? I have no problem to sign a debit order for a specific amount to go off my account at specific intervals. It is convenient and safe. I've had not problems to cancel my debit orders. It does not help to blame the bank. The bank is not party to your agreement with your service provider and only carries out the mandate you gave to the service provider. There is not point to blame the bank for this.
 
Corr said:
In very simple terms, giving a company a debit order authority is like giving your wallet to the shopkeeper at the till and telling him to take what he want!
Click to expand...
Well put.

Debit orders for month to month accounts are a no-no in my book, always reminds me of the opening of "Married with Children" where Al sits on the couch holding his open wallet over his shoulder and everyone helps themselves - including the dog :D

... and the thought of giving SANRAL a debit order authorization - no ways.
 
I have never come across an ISP in South Africa that does not accept credit cards for payment. So what the hell are you on about?
 
deweyzeph said:
I have never come across an ISP in South Africa that does not accept credit cards for payment. So what the hell are you on about?
Click to expand...

There are quite a lot that insist on debit order, but yes, a lot do take CC as well.

Corr said:
This is getting progressively more difficult and recently my ISP has told me that EFT is not an acceptable payment method so I now need to find another alternative.
Click to expand...

Telkom take EFT.

cozinsky said:
Well, it is not smart to give anyone a blanket debit order like you did. You paid for your stupidity and now you want to advocate against the signing of debit orders? I have no problem to sign a debit order for a specific amount to go off my account at specific intervals. It is convenient and safe. I've had not problems to cancel my debit orders. It does not help to blame the bank. The bank is not party to your agreement with your service provider and only carries out the mandate you gave to the service provider. There is not point to blame the bank for this.
Click to expand...

Spot on.
 
Corr said:
This is getting progressively more difficult and recently my ISP has told me that EFT is not an acceptable payment method so I now need to find another alternative.
Click to expand...

You ever heard of a credit card?
 
Just let me clarify some things:-
-This is largely a generalization about the risks to the account holder (me & you) of the debit order system, (though factual to the best of my knowledge and experience)
-As far as I know whether the target account is a credit card or any other does not change the situation much. Neither are acceptable to me as a prudent consumer.
-Of course there are safeguards & limitations in the system....................
-I am not attacking anyone in particular, simply highlighting something that is very relevant to us all, with perhaps the exception of those who have a vested interest.
-As to bank charges....... in all cases the beneficiary pays the charges that are substantial, yet they are happy to do so for the advantage it brings to them.
-In the event of EFT payment, I make the payments monthly by stop order, a few days early, so that the beneficiary has the money op front, but more important, I pay all the charges, not them.............

Well, it is not smart to give anyone a blanket debit order like you did. You paid for your stupidity and now you want to advocate against the signing of debit orders? I have no problem to sign a debit order for a specific amount to go off my account at specific intervals.
Would be nice to choose your wording more carefully. Find out who checks that the amount you put on the debit order is the amount that is actually charged to your account. Yes, ultimately you may have legal recourse ..................:whistle:

Next time an ISP declines your request to do an EFT, offer to pay a year in advance. They should accept that. The other option is to find a prepaid ISP.[/I] I am always happy to negotiate with anyone about anything, having a financial mind and understanding TVoM which many don't, and also then reversing the credit risk, your proposal is somewhat awkward, but then as it is, I do pay them upfront......read above.

The purpose of this is simply to create an awareness, although in this case I indeed referred to an ISP and it is with an ISP that I have an issue, it applies to many other businesses and we as consumers are exposing ourselves on a daily basis.

BTW I also have great understanding for the business risk and the low margins in the ISP business, but why do we disregard or simply accept the consumers risks and their arrogance in not wanting to accommodate us?
 
Last edited:
Corr said:
BTW I also have great understanding for the business risk and the low margins in the ISP business, but why do we disregard or simply accept the consumers risks and their arrogance in not wanting to accommodate us?
Click to expand...

Each company gets to choose it's risk, there is well over 300 ISP's in South Africa, if your current one is not accommodating you, then it's not an industry problem, switch ISP's. No company is required to accommodate any person beyond what's required by law. Consumer choice sorts the rest out, unless it's one of the big 5 operators (not sure on their policies - but you generally just get bent over and you know the rest).


deweyzeph said:
Name one.
Click to expand...

I can, but I won't, I don't think we need a pointing exercise, google will reveal this information for you. I can even name hundreds of brick and mortar stores that don't - transaction fees are margin munchers, some are new (for a proper merchant account you need to be banked for six months). That is irrelevant though, a lot do, 3DSecure works well on risk mitigation. I am merely pointing out that some companies prefer debit orders and it's not an industry problem, it's the business' preference to accept whatever form of payment makes them happy, unhappy clients should find a business which matches their desires.

For some reason the OP does not wan't to use CC or DO (both reversible with plenty of safeguards in the event of a fraudulent transaction), but prefers to pay direct (irreversible with no safeguards) and that's his preference. I just think he shouldn't complain about "ISP's" and just find another that fits his payment profile. There are a ton of ISP's who probably want his business and will accept the EFT with a big smile.

The payment gateways generally do not even release all the funds from the DO/CC runs to the merchant immediately but keep a percentage in hold to honour disputes and refunds.
 
Month-to-month (e.g. 12/24 month contract) debit orders are essential to B2B procedures. Our own country always 2 year contracts, places in Europe can go up to 3-5 years. Do note when someone sign a 24 month contract and pay late, then he breached the contract and no pro-rata will be accepted in any terms. I have even seen people argue here with the 7 day home rental argument which is non-existent. However when you do have a monthly (per month) agreement, then an EFT payment is 100% viable, other options includes prepaid services.
 
Corr said:
IThis is getting progressively more difficult and recently my ISP has told me that EFT is not an acceptable payment method so I now need to find another alternative.
Click to expand...

I am guessing your ISP is Afrifocus.
I returned from an overseas trip in Nov. Due to my own stupidity, my laptop bag was stolen - in it was the laptop, my wallet containing all cards besides one in my pocket at the time, my ID book & passport.
On discovering the wallet etc was also gone I notified my bank (nedbank).
They informed me that in the short space of time between the theft & my noticing it & contacting them, various items had been purchased on my cards. My accounts were subsequently frozen.
Notwithstanding my being a client of 15yrs at my home branch, I was informed without an original ID document they were not permitted by law to open any bank accounts.
I am now in limbo & at the mercy of home affairs for the reissue a new ID document.

I contacted Afrihost early December to let them know of the situation & the fact any debit order will be returned.
I asked if I could pay a few months in advance (dec to february) on my various (4 accounts).
I was told "no this was not possible" bla bla bla.
So off i went to ABSA to make a direct deposit, faxed & emailed proof of payment.

I then called Afrihost again a few days later to ask if advance payment could be made on my accounts - hoping to speak to someone else & get a different answer.
Again, the answer was no. This time I was told that there would be a adjustment of fees in january, and for that reason advance payment would not be possible.
I asked the lady how best to deal with this situation.
I got the most ludicrous answer of all time: I was to wait until they advised me of the debit order being returned, and then make a direct deposit. However, in that time my line would be suspended & there would also be a R50 penalty levied by Afrihost as a result of the returned debit order. Of course on the other side, Nedbank also hit you with a fee as a result of a returned debit order - screwed from both sides (otherwise known in the porn industry as double penetration) !

Unhappy with this situation & the interruption of service, i sent Afrifocus an email:
I called your offices on friday to enquire about paying in advance to
the end of February.
I was told by the person i spoke to that this would not be possible as
there was to be some kind of price decrease in january.

Surely if I paid the normal amount & there is a decrease, any
"overpayment" would just reflect as a credit on my account.

I told your chap that i usually round up all my payments for various
accounts & the "overpayments" just sit in the account as a credit. He
was certain this was not possible with Afrihost. Can that be true ?

Regards
Grant
Click to expand...

The response was this:
Please be advised that we do not offer EFT as a payment option at all for any of our products.

However if you make an payment in advance - this is done at your own risk.
Please note that manual payments should be done in advance.

*PLEASE NOTE THAT EFT OR DIRECT DEPOSIT IS NOT A PAYMENT OPTION WE OFFER. FROM THE NEW MONTH OF JANUARY, WE WILL NOT BE ACTIVATING ACCOUNT UPON PROOF OF PAYMENT, THE AMOUNT PAID WILL NEED TO REFLECT ON OUR BANK STATEMENT, ONCE DONE ONLY THEN WILL YOUR ACCOUNT BE ACTIVATED.
THIS CAN TAKE UP TO 72 HOURS.

Also note that if a debit order bounces - our reconnection fees go as high as R400.00.
To avoid this from happening please make provision for the monthly amount.

Thank You!

Please do not hesitate to contact us if we may be of further assistance.

Warm Regards
Click to expand...

A lot of back & forthing, I finally get this email from Afrifocus, by now, virtually everybody in the company (tea lady included) must now know of the situation regards my bank account / ID document problem:
Hi Grant,

I trust this mail finds you well:)

Please note you can make a payment advance in advance towards your account for your services to be kept active until your Identity document issues has been sorted, please find our banking detail below and make the payment before the 25th of the month and send the proof of payment to accounts at afrihost.com,

AFRIHOST
ABSA
CHEQUE ACC
ACC NO: 4052427822
BRANCH: 632005

IMPORTANT:
Please use your account number, domain name OR ADSL username as a reference to your payment.
eg A1234567(account number), domain.com(domain name) OR [email protected](ADSL user)

Once the payment has been made, please be sure to get the proof of payment to Afrihost as soon as possible so that we can attach it to your account and resume your services.

You may use the following methods:
FAX: 0865528000
Email: [email protected]
Click to expand...
But despite them being fully aware of the bank debit order situation, Afrihost continually process the debit orders.
 
Companies love debit orders because that means they can take money by force.
Always remember, the customer is a bastard, even though he pays and makes you a profit. That is the mentality in SA business
 
@grantza - if I were you, I'd give them notice as soon as I had my new ID book & could move my line back to Telkom ; then choose a different ISP that's more accommodating. Afrihost obviously don't value your monthly contribution.
 
CrazYmonkeY159 said:
Telkom Internet allows EFT i beleive?
Click to expand...

Well, you wouldn't need to commit to a Debit Order, as you can pay your phone account in a number of ways.

TI is still charged to their invoice, right ?
I only used TI for a short time when I first got my ADSL line, so don't know what the situation is currently.
 
Debit orders are from the devil I tell ya! I have been able to cancel all debit orders, except for Virgin Active and now pay by EFT for everything, even my ISP. I am more than capable of running my own budget and knowing what needs to be paid at the end of the month. Debit orders are just a recipe for a stuff up! :wtf:
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X