Fraudulent debit orders are a big problem in South Africa, with nearly one million disputes lodged every month.
Many of these fraudulent debit orders are for small amounts – typically under R100 – in the hope that the account holder will not notice the monthly deductions.
These debit orders often happen when a fraudulent service provider gets their hands on your personal details, and use them to institute a debit order on your account.
The practice has become such a problem in the country that the Payments Association of South Africa (PASA) had to step in to find a solution.
In May, the organisation said it was close to implementing DebiCheck, a service which allows consumers to authenticate a new debit order before it is processed.
This is as opposed to canceling an unauthorised debit order once it has gone through.
Until the system is in place, though, South Africans are advised to check their bank accounts regularly for unexpected deductions.
What consumers can do to get their money back
If you notice an unauthorised debit order, you have the ability to reverse the payments.
Advocate Clive Pillay, ombudsman for banking services, told Radio 702 that consumers who have fallen victim to this fraud should:
- Give their bank written instruction to stop the debit order.
- Instruct their bank to reverse the debit order.
The bank will then check the authenticity of the debit order mandate, and if the bank cannot furnish a legitimate and authentic mandate, they will refund the money.
You may still pay costs
While consumers may think they are not liable for any costs, as they have not authorised the debit order, this is not the case.
Pillay said the bank has acted on a mandate, which means that administrative costs were incurred by the bank which may be levied.
He said the claim for those costs will be against the fraudulent service provider which instituted the debit order, and not the bank.