GEORGE NEWS - A client of Capitec George who was the prey of companies deducting small amounts by debit order from his account, is exasperated that his bank seems to be unable to do anything about it.
The man, who wants to remain anonymous, said in August he and his wife noticed that four companies had deducted four different amounts from their Capitec bank account.
"When we checked our records, we found that one of these companies has been stealing from our account for the past few months. My wife and I immediately went to see the bank manager, but she said that it was not their fault. She could not explain how it happened.
"When I wanted proof of my authorisation for the amounts deducted, she put the onus on me to supply the bank with proof that I did not authorise it," said the livid client.
In August, R49, R55, R55 and R99 were deducted from their account under the names of Carebox, Riskfin, Dynamix and Digicash.
"It is unbelievable that the bank cannot stop the debit orders for you even if you sit in front of them with your ID and fingerprints, but they can institute them without any authorisation," he said.
"Capitec has been of no help whatsoever. I have had to institute all these measures to safeguard myself at a bank to whom I have given my money for safeguarding, at a fee.
"I would like to warn other people to go through their bank statements. SMS notification is only applicable to amounts over R100 so you will not know whenever such small amounts are being deducted."
The George Herald's attempts to contact the companies that made the deductions were fruitless, save for one: Riskfin. A spokesperson, Edith Mears, said they are trying their utmost to get their name cleared after having done debit order hosting for Carebox for some time. "We had an agreement with Carebox, a company that sells products through a call centre. Our relationship with them was ended when we started getting complaints about this debit order issue."
Mears said Carebox was reported to the Financial Services Board (FSB), but according to the FSB, the services rendered by Carebox did not fall under the Financial Advisory and Intermediary Services Act and as a result they could do nothing.
When dialing the Carebox number, it just rang.
A woman in the Digicash call centre said the main telephone number was the one to phone to get hold of the MD, Stanley Snyman. That line also kept ringing. A recording that plays after you have dialled the number, states that Digicash "merely deducts money on behalf of other companies".
When you Google these companies, their names also appear on Hellopeter.com, a portal for consumers to report good or bad service, and they all get a thumbs down.
* According to Charl Nel, Capitec head of Communications Marketing and Corporate Affairs, the bank has a sophisticated system with a high success rate to stop further debits from the same user.
He responded as follows:
The dilemma we have, as do all other banks, is that the reference number used for the debit order is amended by the debit order initiator. The stop will not prevent a further debit from occurring.
When a client wants to dispute a debit order, the branches can obtain the contact details for the companies responsible for the debit. Depending on when the amount was debited to the account, the branches are able to reverse the funds back into the account immediately. As mentioned above, a stop payment instruction can be placed on a disputed debit order(s) to prevent the debit order from debiting again. Should a debit order be disputed within 40 days of the debit order date then the money will reversed immediately. This carries a fee of R20 per dispute.
If the debit order date exceeds 40 days from the date of the dispute, then the amount will not be reversed immediately as a verification request must be sent to the external bank. The external bank needs to prove a legitimate agreement exists for the debit order, or alternatively approve the dispute and therefore refund. There is no guarantee that disputes older than 40 days will be credited and these disputes carry a fee of R25 per dispute.
Debit order details and cancellation
Only the service provider can cancel a debit order that they initiated. The Payments Association of South Africa (PASA) states that a client’s first recourse is to the party with whom the debit order was signed or the party that submitted the debit order for collection. Every client is however, entitled to dispute a debit order with their bank.
Future solution being sought
The head of our Interbank department represents the bank on the Authenticated Collection Project Steering Committee, that has been tasked with finding an industry solution to this issue. He confirmed that the banking industry has been working on a project to introduce a new messaging standard for all retail payments that will provide banks and clients with much better payment information.
The head of our Interbank department represents the bank on the Authenticated Collection Project Steering Committee, that has been tasked with finding an industry solution to this issue. He confirmed that the banking industry has been working on a project to introduce a new messaging standard for all retail payments that will provide banks and clients with much better payment information.
The intention is to lodge all debit orders on a debit order database prior to it being presented for payment. This development will enable the paying bank to obtain the authorisation from its client prior to accepting and processing the debit payment.
It will further help us to identify rogue users that have high dispute/complaint rates and to allow the regulators to take the necessary corrective action, which includes blacklisting the company and its directors from entering and using the debit order system. The expected timeline for the first phase of this project is September 2016 and unfortunately there will still be a period where old debits will still be accepted.
It is a lengthy project and complicated process and we do appeal to our clients to remain patient with us.
See Nel's full response here.
ARTICLE: ALIDA DE BEER, GEORGE HERALD JOURNALIST
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