The dreaded NAEDO Debit Order

[Foxhound5366]

This makes for a bit of a scary read: http://www.businessonline.standard.co.za/business_solutions/cash_management/naedos.jsp

NAEDO also allows you to monitor debtor accounts proactively for up to 32 days and make collections as soon as funds become available.

I'm somebody who believes in paying every penny I owe, and I'm also happy to pay by debit order to avoid the unnecessary hassle of paying by EFT all the time (in ten years I think I've only been double-billed accidentally about five times and each time the money was reversed quickly enough).

THAT SAID, I hate the way that banks are deliberately screwing over their own customers. I mean, this is the place you entrust to keep your money safe, right? If this was the Wild West, it'd be a place that the robbers wouldn't be able to get into.

Instead, in the 21st Century, we find banks selling to companies the ability (at a fee of course) to MONITOR your bank account for up to a month, so that they can grab money they feel is owing to them at any time it becomes available.

Who's working for who here?

 

[Grubscrew]

If he average South African honoured their commitments there would have been no need for such a service.

 

[MagicDude4Eva]

You will be even more scared when an insider tells you how efficient it works. The system goes as far as that it will take debits before your salary clears and it is capable of very accurately predicting when you will have money in the account.

Solves a lot of bad debt as people quickly cash out salaries to avoid debits.

 

[Foxhound5366]

MagicDude4Eva, my question is simply ... why is the bank investing more effort into ensuring that it can take my money out of my account, than helping me proactively to grow it?

I'm a paying customer of my bank, so its processes need to be customer-centric around ME, not my creditors.

Obviously it's just about the money banks can charge both debtors and creditors in this process, and it's a brutal cycle where only the banks win. The only thing that never loses in any game is the playing field.

 

[MagicDude4Eva]

We all know that banks have no interest in growing your wealth. Most money is made through debt via interest and loans and overdrafts.

Banks would not survive if it was not for that. Think how much money African Bank lost in unsecured lending - it was over 8bn rand.

 

[Swa]

MagicDude4Eva, my question is simply ... why is the bank investing more effort into ensuring that it can take my money out of my account, than helping me proactively to grow it?

I'm a paying customer of my bank, so its processes need to be customer-centric around ME, not my creditors.

Obviously it's just about the money banks can charge both debtors and creditors in this process, and it's a brutal cycle where only the banks win. The only thing that never loses in any game is the playing field.

Yup, and it also happens to be one of the most expensive banks. All the more reason to switch to the cheapest banks so they don't have the resources to implement schit like this.

 

[Fudzy]

If he average South African honoured their commitments there would have been no need for such a service.

Nail. Head. You agree to the debt, don't avoid paying.

 

[Swa]

Nail. Head. You agree to the debt, don't avoid paying.

Except that debit orders don't necessarily involve debt. It's scary that a company can have so much power by bribing a bank when the government can't even look into someone's finances legally without making a proper case for it in court. If someone isn't paying their debt they should follow the proper procedure outlined by law in order to get a garnishing order.

 

[Foxhound5366]

Look guys, this is not about paying debt or not paying debt. This is about not getting the level of customer-centric service I expect from a company I pay R200/month + other related fees just to hold onto my money for me (which they earn all sorts of untold benefits from).

It's a bit like ... I dunno, going to McDonalds, and McDonalds is actually conspiring with your health insurance provider to ensure that some medicine is slipped into your burger, so that you end up submitting fewer health claims to the insurance scheme. Is McDonalds selling you burgers still, or in the business of insurance?

 

[Swa]

I pay R200/month

That explains it. Banks should be paying us like they do in other countries. Capitec pays me +R300 for the privilege of managing my money.

 

[biometrics]

I have a savings account at ABSA and a cheque account at FNB. My salary goes into FNB and my debit orders go off ABSA. I prefer companies with debit order from me to have limited control over what mistakes they can make with my account ... therefore the ABSA account only has as much as it needs to cover the debit orders.

 

[Kosmik]

I have a savings account at ABSA and a cheque account at FNB. My salary goes into FNB and my debit orders go off ABSA. I prefer companies with debit order from me to have limited control over what mistakes they can make with my account ... therefore the ABSA account only has as much as it needs to cover the debit orders.

This is the best of both worlds I think. Bank can hit the account but if there are extra funds move them elsewhere. To be frank, it's not worth keeping funds in your current account, excess money should be shifted to limited interest at least or Unit trusts etc.

 

[sn3rd]

NAEDO tracking is but one essential tool for ensuring successful collections. It is necessary for cases where consumers are unable to plan their finances properly, leading to failed debit order runs. Should the collecting company just deal without their instalment/premium that month? That doesn't seem fair.

However, due to no authentication, a NAEDO debit isn't as fool proof as most companies would like. In the future, AEDO debits could become the norm and consumers would lose the ability to dispute debits due to having authenticated when the debit order is loaded.

These mechanisms are not aimed at the good, paying customers. They are aimed at the customers who evade payment by having insufficient funds available and disputing debits.

 

[Swa]

NAEDO tracking is but one essential tool for ensuring successful collections. It is necessary for cases where consumers are unable to plan their finances properly, leading to failed debit order runs. Should the collecting company just deal without their instalment/premium that month? That doesn't seem fair.

However, due to no authentication, a NAEDO debit isn't as fool proof as most companies would like. In the future, AEDO debits could become the norm and consumers would lose the ability to dispute debits due to having authenticated when the debit order is loaded.

These mechanisms are not aimed at the good, paying customers. They are aimed at the customers who evade payment by having insufficient funds available and disputing debits.

As the person with the money I should be seen as the bank's primary and most important client. There are legal avenues to follow for collecting debt if that is the case. If it's not debt then they really have nothing to complain about. Instead of making it easier for unscrupulous companies to just take money they should institute a system where I can claim it back. The standard answer there is still to sort it out with the company.

 

[ProfA]

Makes those silly things called contracts basically toilet paper when the bank can take money days before the agreed upon date.

 

[Aghori]

I have a savings account at ABSA and a cheque account at FNB. My salary goes into FNB and my debit orders go off ABSA. I prefer companies with debit order from me to have limited control over what mistakes they can make with my account ... therefore the ABSA account only has as much as it needs to cover the debit orders.

I do exactly the same thing... same banks as well!

 

[Beachless]

I have a savings account at ABSA and a cheque account at FNB. My salary goes into FNB and my debit orders go off ABSA. I prefer companies with debit order from me to have limited control over what mistakes they can make with my account ... therefore the ABSA account only has as much as it needs to cover the debit orders.

This is the best of both worlds I think. Bank can hit the account but if there are extra funds move them elsewhere. To be frank, it's not worth keeping funds in your current account, excess money should be shifted to limited interest at least or Unit trusts etc.

Not really, what if company A decides to double bill you and then there is not enough money for company B ?

 

[Kosmik]

Not really, what if company A decides to double bill you and then there is not enough money for company B ?

Company A is the liable for Company B and any penalties incurred, done this before.

 

[Swa]

Makes those silly things called contracts basically toilet paper when the bank can take money days before the agreed upon date.

Actually the contract is between the client and the company, not the bank. There should be a dispute system though instead of simply referring us to the company. The final decision should be with the client.