Card transaction double debit problem is a persistent headache for retailers and consumers alike

2015-03-24 00:00

RAKESH Lutchman was both alarmed and baffled when he noticed what seemed to be a double debit to his FNB cheque card after he refuelled his car at a local petrol station.

Lutchman said he had bought fuel for R150 and oil for R23, totalling R173, at a BP garage in Raisethorpe, on February 27, and duly received an SMS notification of the transaction.

But he was concerned when four days later he received a second SMS notification from FNB, this time for a R150 purchase at the garage.

“When I contacted FNB I was advised it was two transactions for two separate purchases. I was unable to get an explanation as to how or why I was charged for the second transaction of R150, which never took place,” he said.

“When I contacted the service station I was advised the problem lay with FNB.”

Lutchman filed a dispute with FNB requesting a transaction reversal.

“My concerns are — am I banking with the wrong bank or am I fuelling at the wrong service station? Could this have happened to other customers who may be unaware of it?”

It turned out that the garage was not at fault and that the issue appeared to have resulted during the processing of the transaction.

When I raised the “double debit” issue with BP Raisethorpe, owner Kam Moodley said the Fuel Retailers Association was aware of problems garages were occasionally experiencing with banks’ payment systems.

He said banks sometimes sent a second authorisation SMS following a break in electronic communication during a transaction between banks, although a second transaction had not occurred.

Moodley checked his sales records and confirmed that there had been one transaction totalling R173, in Lutchman’s case.

He also sent me a notification that fuel retailers received from the Payments Association of South Africa, which regulates the banks’ payment systems, advising that as more consumers opt to pay by card “occasional operational matters may arise”.

It explained that if a transaction failed at the point of sale, customers would occasionally still receive an SMS, although the debit had not occurred.

“A second transaction will have to be performed to enable a successful payment to the merchant/retailer,” PASA said.

However, Lutchman confirmed that his card was only swiped once.

FNB’s head of fraud and disputes, Charlaine Albertyn, said Lutchman’s transaction involved neither fraud nor a double debit.

“FNB authorised the amount of R173 and reserved it for purchase. The systems of the service provider, provided by another bank have however been set up in such a way that it splits the purchase of fuel and oil upon settlement,” Albertyn said.

“Since the reserved amount and the settlement amount did not match, the customer received another inContact message.

“We have released the R173 reserved ­authorisation so that it reflects in the customer’s available balances,” she said. She added that he had not received an SMS notification for the R23 as it was below the notification limit.

Fuel Retailers’ Association CEO Reggie Sibiya said he had not heard about cases similar to Lutchmans, although the association had been “fighting” the “double debit” issue with PASA for two years. He said it caused friction on forecourts when transactions failed and consumers had received an SMS notification, as some customers did not want to allow staff to swipe their cards again.

“The banks should send a SMS to consumers saying your transaction did not complete. The motorist thinks the money has been debited because it shows that the money has gone through and the bank takes two to seven days to reverse the transaction from the customer’s account. They don’t come back to the customer to inform them. They simply credit that money back to your account,” he said.

PASA CEO Walter Volker described double debits as “failed reversals” which occurred after a transaction failed.

“In such cases the cardholder’s bank would have sent an authorisation response to the retailer, but the retailer would not have received confirmation of the transaction,” he said.

“Very often, the bank would send an SMS to the cardholder to advise authorisation of the purchase,” he said.

“If a reversal is not generated timeously, the bank will still think the transaction was authorised, but the retailer will be required to do another transaction, resulting in a second authorisation and SMS, and the perception of a ‘double debit’, ” he said.

“As soon as the reversal is processed, the customer’s account is rectified and in most cases an SMS advising of the reversal is generated.”

He added that failed reversals affected all banks and retailers, and PASA had done much work to alleviate the problem in the fuel retail sector.

“An industry project to analyse existing scenarios affecting failed reversals is currently in progress at PASA.

“This will ensure that the root cause of the problem is identified and resolved,” he said.

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