Debit order fraud: Beware of sharing your banking details


Consumers must be careful when sharing personal information that could be used by fraudsters to make unauthorised debit orders, Payments Association of South Africa CEO Walter Volker has warned.

Banks are working with the Payments Association of South Africa (PASA) to deal with debit order fraud – a situation when some companies process debit orders from consumer bank accounts without their consent.

In August PASA's offering DebiCheck went live across 10 banks, including the big four - ABSA, Nedbank, FNB and Standard Bank.

According to PASA, DebiCheck is a new type of debit order – confirmed electronically on a once-off basis at the start of a consumer's contract with a company. The consumer confirms details to authorise future debit orders using their mobile phone by either confirming on a banking app or typing a code on their cellphone.

In an emailed response to questions from Fin24, Volker said that debit order fraud is committed when companies get bank account numbers of consumers – either illegally through accessing databases or pretending to be sales or call centre agents trying to sell consumers products.

"Companies then use these account numbers to create debit orders files that are processed to consumers’ accounts," he explained.

"We want to remind consumers to be watchful when entering into contracts, verbally, electronically or in writing. Also, not to provide or confirm account information if they are not certain what exactly it will be used for," he said.

"We also encourage consumers to check their bank statements on a regular basis and to verify their statements against contracts they have signed," he added. Consumers should also refrain from sharing personal information over the telephone, through e-mail or social media.

Be alert

Volker advised that consumers check their bank statements frequently, if they notice an unfamiliar debit order they should look at the description of the transaction. The description will indicate which company collected the money.

The consumer should contact the company to query the debit order, or if they are not sure about which company it is they can query the debit order with their bank.

"Consumers have the right to dispute or instruct their bank to reverse debit orders they have not agreed to or are processed outside the mandate they have given. 

"It will also be extremely helpful if consumers would obtain an affidavit that they can provide to their bank, when disputing the transaction."

Banks can then reverse the debit order for consumers to recover their monies. However, Volker said that if a consumer has indeed agreed to a debit order and if there is a valid mandate in place, they should not ask the bank to reverse the debit order.

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