Unauthorized debit orders

[saor]

Yay - it's happened again. Different company this time (BRC or BRQ via DIGITECH), exactly the same amount - R89. And then it costs R5 to cancel the debit order. And I've yet to be paid back from the previous time it happened. It's a bit of a joke that there's no recourse to prevent this from happening yet again.

 

[MKFrost]

Banks are not safe period.

I keep the minimum in the bank and put the rest either on a call account or if there is enough bump it over to Allan Gray or similar. No way they can put debit orders or anything funny against those and if they do clone my card or some other weird schit then they end up with the couple of hundred in my account.

Its a pain sometimes to first transfer funds if needed but I sleep well at night.

 

[Paul Hjul]

These fsckers are clever, they come back next month with slightly different details.

This should be illegal for anyone to simply load debit orders, there must be authorisation from the client side else it does not go through. Catering for this on internet banking would be cool.

It is illegal - its called fraud

 

[saor]

It is illegal - its called fraud

And yet the banks do nothing to prevent it. The problem is they take such a small amount of money that it's almost too much hassle to follow through with trying to claim it back. I'm going to email the Ombudsman and take it up with them because I can't deal with this nonsense every few months with the banks just sitting on their hands unable/unwilling to take action.

 

[ponder]

It is illegal - its called fraud

We know that but there is very little clients can do about it. My mom called me last week as some company has a R399 debit order on her account, something she has never authorised or even heard of the company. Some googling revealed this is a very common and she is not the only one, even the banks fraud department knows about the company but they are adamant that it's not their problem and people must sort it out with the company, all they can do is reverse the debit order but you will have to do this every single month. Your only practical option is to close your account which is a schlep. She's even opened a case with the police but we all know that will go nowhere.

Problem is the system is flawed, I can think of an easy way to fix it but you would have to get all the banks onboard or force them by legislation which does not exists.

 

[MrR]

It's actually not the banks at fault (per se), but rather SARB or more specifically PASA as they instituted the EDO system in the mid 2000's for various reasons.

The banks need to comply with the regulations that PASA have set out just as much as the service provider need to comply with the requirements for creating that debit order.

Have a look at some of the info on the PASA website: http://www.pasa.org.za/more_consumerguide_do.html#DO_3

saor, I'd suggest that you escalate this to the Payments/Interbank department at your bank and for good meassure lodge a complaint at the Banking Ombudsman as well - not against your bank, but the service provider.

 

[saor]

saor, I'd suggest that you escalate this to the Payments/Interbank department at your bank and for good meassure lodge a complaint at the Banking Ombudsman as well - not against your bank, but the service provider.

Will do, thanks. The gist of the conversation with FNB the last time was that it's my resonsiblity to check my account each month for unauthorized debit orders. Which I can understand, but what I'm not ok with is the fact that I now have to waste my time trying to get my money back from a company who quite obviously want to avoid that at all costs. It's a tedious affair for a meager sum of money...but they (these scam companies) know this, and the banks score their R5 every time I have to cancel one of these debit orders.

 

[zippy]

Just logged in to FNB and saw that I've had R89 withdrawn twice, via a debit order I never authorized. The company in question was StratCol, who act as agents doing the debit order for another company called TopAds. I phoned StratCol and was told I had to call TopAds. So I called them and they're a telesales company. When asked how they got my account number (I told them I don't entertain telesales calls) the operator said that someone else probably gave my account number by mistake.

They're going to cancel it and re-reimburse the money should the voice recording show that I never authorized the debit order.

But my question is: How does someone initiate a debit order without me authorizing it? Is it not the banks responsibility to safeguard my account & request that the appropriate authorization has been granted for debit order requests? I have to enter OTPs for all my online transactions and use passwords to log in to my account, but someone can take money from my account via a debit order without me even authorizing it? How is this possible and are there any measures one can take to prevent this from happening again?

how did they get your bank details ?

 

[saor]

how did they get your bank details ?

No idea. I've never in my life entertained a sales call so I'm clueless as to where they got it. They claim that what probably happened was they made a sale *ahem* to a genuine customer who must've given my bank account number by accident. Which is bs cause surely they need my name & account number for a debit order?

 

[MrR]

You can ask the bank to investigate / provide you with the debit order details as well, which may show the name of the account when they created the debit order. In doing so you can call their BS if it's your name that they used (in which case I would threaten the company with legal action for entertaining fraudulent activities).

Could be an innocent mistake/coincidence that your account number was provided.

 

[Paul Hjul]

Problem is the system is flawed, I can think of an easy way to fix it but you would have to get all the banks onboard or force them by legislation which does not exists.

There is a major problem in the way banks mishandle clients funds - closed an account I've had for 17 years after the clerk told me that she can't look up who put in a drawing request (a call account) the other day - I know that she could interogate etc ...
However this is separate from the core problem of unauthorized debit orders which is the unauthorized part which is already illegal.
The banks should be held to task for permitting fraud on accounts BUT can't because they are following a regulation onto them - as MrR points out.

 

[zizebra]

So. We have several problems that we cannot address and noone can solve. We gave the keys for the safe to thieves to keep. And we cant get the thieves to return the keys.

Banks can do something but they have no motivation. We cannot prosecute these thugs that steal through the law. This is a well organised crime. It reminds me of the guys stealing from us through wasp like 31314.

But then the law gave banks rights to screw us in the first place. We can only choose the bank which we want to screw us.

 

[Skywalker786]

No idea. I've never in my life entertained a sales call so I'm clueless as to where they got it. They claim that what probably happened was they made a sale *ahem* to a genuine customer who must've given my bank account number by accident. Which is bs cause surely they need my name & account number for a debit order?

Very easy to get your money back, INSIST that the teller reverses the debit order, reason provided is unauthorised debit order, you will have the funds back in your account within a minute, do not under any circumstances let the teller give you any bull about waiting for the presenting company to refund etc.

Recurring debit orders a bit more difficult. As the company can put in different amounts. Get your bank to block that company presenting debit orders on your account.

 

[ponder]

The banks should be held to task for permitting fraud on accounts BUT can't because they are following a regulation onto them - as MrR points out.

Exactly. One would however think with all their influence/power that they are in a good position to lobby/instigate change but I don't see this happening either. It's a mess and the man in the street is bearing the brunt of it.

 

[krycor]

How to make a million in one day:

1) Open account with debit order service provider
2) Look any where on internet for one account number for each bank to get basic layout of account numbers.
3) Add hundreds of thousands of similar combinations
4) Take R99.00 from each account
5) Withdraw money
6) Enjoy cocktails on tropical island.

You're Welcome.

Just set this as an auto trigger on a few prominent political parties and watch how fast regulations change

 

[Fulcrum29]

I must say that Netcash have some great security checks in place, never had a problem, but we do have companies whom provide banking details with little to no money in the account… quite a problem when running batches and the admin gets crazy.

We have about 6 clients who do not pay any interest as it is against the policies, but hey they are always late with payments and go havoc when their services are suspended and these companies are quite large players in our market.

 

[saor]

So after this happened a third time I contacted the Banking Ombudsman and was requested to file an official complaint with the bank and get a written response. I'd already logged an online complaint a few months ago but I sent another email to FNB and the response was pretty much the same as the first time: When this happens I need to go into the bank to reverse the charge immediately. I need to monitor my accounts. I need to pay FNB R5 every time I stop a debit order.

It's weird - the R5 I have to pay for something FNB authorized is the thing that's starting to annoy me the most. I don't care if it's R5 or 50c - it's ridiculous.

Anyway. I've got the banks response in writing and I'm a bit unsure about where to go from here. The banks seem to have their hands tied, these 'companies' will just keep on popping up...so who do I point the finger at when I next contact the Banking Ombudsman? Also - part of the complaint form asks how I'd like the situation resolved, and I feel it futile to ask that banks don't allow unauthorized debit orders because it seems they just following protocol.

Ideally I'd like to say:

1.) That FNB doesn't permit any debit order on my account unless I authorize it (not gonna happen imo).
2.) FNB waiver all costs pertaining to cancelling a debit order (and refund those costs already incurred. that's only R15 but damnit it's the principle)
3.) FNB implement a system whereby I am able to stop and reverse a debit order without having to appear in person at a bank. I don't have time to go in or to hunt down my stolen money from these 'companies'.

Any advice or suggestions?

 

[ToxicBunny]

Suggestion number 3 would be the one i like..

with the addendum of being able to bar the person who initiated the debit order from debiting the account ever again in the future.

 

[MKFrost]

2.) FNB waiver all costs pertaining to cancelling a debit order (and refund those costs already incurred. that's only R15 but damnit it's the principle)

It's not just R15.

How much do you earn on average an hour?
How many hours did you waste on this?
How much did you waste on the phone calls [and time]?
What distance did you drive to the bank and what is the AA rates for your type of vehicle?

Ask a lawyer friend what they charge and charge say 60% of that, do not use actual cost for your calls etc.. Add it all together and tell the Ombud you want full restitution for losses suffered due to this. Should easily come to a couple of thousand I guess.

If he does not want to, draw up an account and send it registered mail to the bank CEO demanding payment within 30 days for the 'losses' suffered. If no response take it to the small claims court and get a summons issued. That will mean that the CEO will have to appear which will never happen so chances are that they will settle.

Do that each time and I think the CEO will soon have a new strategy in place.

!!!! I'm not a lawyer - just thinking out load what I would do. The bank will never give you your R5 and they do not give a flying ****. They will however start taking notice when each debit order start to cost them like R3,000.

 

[saor]

It's not just R15.

So the company actually paid my money back this time (the R89). FNB decided they were entitled to a R30 service fee because the company did a cash deposit (something I have no control over):
View attachment 83119
So even if I monitor my own account and take the time out of my day to pursue these companies to get my money back, I still end up will less money than when I started:

1.) Company x debits my account for R89
2.) It costs me R5 to cancel that debit order
3.) FNB takes a R30 service fee
4.) I'm left with R54.

FNB now wants me to contact the company yet again to request the R30 I lost due to the service fee. That's in addition to all the time spent on the phone trying to sort this nonsense out. Again - it's not the R35 I'm crying about here, it's the fact that I've lost money and FNB are making money from this whole process. FFS.