Strong stand against systems’ abuse

2014-07-29 00:00

THE Payments Association of South Africa (Pasa) has taken a stand against a company that has allegedly abused banks’ credit-card systems to ring up high-pressure sales to unsuspecting elderly consumers.

I featured the case of Robert Hurst (84) a few weeks ago who FNB agreed to refund after he complained to me that Durban-based United Thermal Technologies (UTT) had debited his credit card for R17 700 instead of an agreed R430 a month over three years for a solar water-heating system.

I recently also assisted Brian Clarke (91) after his case featured on Carte Blanche in which he also alleged that the company had debited his FNB credit card for R17 700 when he had agreed to R368 over 48 months. FNB had, at the time of the exposé, declined to refund him, saying he had entered his Pin and it was therefore a “legitimate and authorised transaction”.

However, when I contacted FNB regarding Clarke’s legal right to a refund in terms of the Consumer Protection Act, again pointing out the sales technique and that he had cancelled the deal in writing within the five-day “cooling-off” period allowed for direct-marketing transactions, the bank reconsidered and last week agreed to refund him.

“FNB confirms that we have compensated the customer, based on the specific merits of his claim and based on the specific nature of the incident,” said FNB cheque and debit card fraud head Charlaine Albertyn.

“FNB reviews such claims on a case-by-case basis and we urge our customers to take extreme caution when providing their card and banking details to sales people as the bank considers cases where a transaction has been authorised by the customer entering their Pin, as a legitimate and authorised transaction,” she said.

Albertyn added that the bank had investigated UTT’s case and found the funds were paid into a Standard Bank account via a Standard Bank Point of Sale (POS) device. “The matter has been referred to Standard Bank given the complaints and we were advised that they are investigating this merchant further,” she said.

Repeated attempts to contact UTT on its landline and office cellphone were unsuccessful yesterday. Someone who answered the landline and gave his name only as “Kyle”, said the company had moved to Kempton Park.

He said another “recruitment and marketing” company called RCM was now based at the premises. I asked Standard Bank and the Pasa CEO Walter Volker if the bank could take the credit-card machine away from UTT.

“Standard Bank was the acquirer on record for UTT from February to June 2014.

“When it came to the bank’s attention that UTT had been listed under an adverse merchant list with MasterCard, subsequent to the enrolment of the merchant, Standard Bank conducted an investigation into UTT, and on finalisation, terminated merchant facilities,” Volker said.

“Mercantile bank also had a merchant agreement with UTT, but after close monitoring, suspended the merchants’ services in June 2014.” Volker added that to the best of Pasa’s knowledge, UTT should no longer be able to accept card payments. “If evidence is found to the contrary, Pasa will immediately investigate with the relevant acquirer,” Volker said.

Volker said that Pasa does not as a rule receive direct complaints regarding merchant abuse of POS terminals but if it did it would raise the complaint with the acquiring bank. “Generally, it is advisable that cardholders get in touch with their card-issuing banks, who will then contact the merchant acquiring bank with regard to a breach of rules. In the event that enforcement of rules are required, the Pasa structures would be responsible to ensure that this happens.

“South African acquiring banks are bound by Pasa rules and regulations that place a responsibility on banks to ensure merchant practices are in line with these rules.

“This includes ethical merchant behaviour, fraud monitoring and the ability of cardholders to dispute transactions where applicable. Unethical merchant behaviour is taken extremely seriously by Pasa and its members,” Volker said.

Volker added that the practice of surcharging — charging consumers an extra fee such as a five percent charge on purchases when paying by card — is prohibited in terms of Pasa’s rules.

The reason some merchants try to levy the fee is to cover their own bank charges for transactions. Consumers exposed to this practice should report it to their banks or to Pasa at­

pasa@pasa.org.za.

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