First National Bank (FNB) has waived the fee for stopping unauthorised debit orders through its electronic banking channels, in an effort to actively clamp down on business customers who facilitate unauthorised collections.
According to FNB, the new move is in a bid to combat the scourge of rogue debit orders impacting the financial industry and some of its customers. The bank had previously charged a free of R5 for stopping debit orders via the FNB app, Web site and USSD code.
Ryan Prozesky, FNB Consumer Core Banking CEO, says the issue of unauthorised debit orders is of great concern to the bank. He adds that the financial institution is actively monitoring and analysing non-FNB businesses that are processing illegal debit orders on FNB customers' accounts, while taking steps to act decisively to curb such activity among its business clients.
"We believe that eliminating fees associated with stopping debit orders via our electronic channels will empower customers to have full control of their bank accounts. Customers will no longer be charged for stopping unauthorised debit orders of less than R200 through the app, online banking and USSD, for those who do not have access to the Internet and smartphones," says Prozesky.
Organisations which are found to be processing illegal debit orders, according to the bank will be reported to payment body, the Payments Association of South Africa (PASA) and the bank will eventually terminate its services.
According to PASA, over the last few years there has been a significant increase in debit orders processed to bank accounts without permission (a mandate) from consumers. As a result, in June, PASA introduced DebiCheck, a debit order authentication system which allows banks to require prior specific debit-order mandates from customers before a debit order is processed.
The new system, which is currently being piloted across 11 local banks, including FNB, will in future replace the authenticated early debit order and non-authenticated early debit order systems, currently being used by banks, notes PASA.
"This project is one of the largest interbank payment projects we have had to date - it is an entire eco-system change, with big complexities and notable infrastructure changes that will affect banks, consumers and users," says Walter Volker, CEO of the Payments Association of South Africa.
FNB says its customers are currently notified via SMS every time a new debit order is raised on their accounts for the first time, as well as the amount and the service provider's name, and if they believe it to be unauthorised, have the ability to stop, dispute or reverse it.
"While we are collaborating with the industry to develop long-term solutions, including DebiCheck, we see it as our role as a responsible bank to warn and help customers protect their hard-earned cash.
"When stopping a particular unauthorised debit order, customers are able to specify a range of amounts to prevent debit orders from a particular collector to be processed in the future," adds Prozesky.
Debit orders that are higher than R200, according to FNB, can still be stopped, disputed and reversed via the banks contact centre or at any FNB branch, at a fee.
"The fee is to prevent customers from abusing the system by reversing or stopping legitimate debit orders," concludes Prozesky.