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Debit fraud: Here is how SA's big 4 banks are handling it

Nov 08 2018 10:19
Lameez Omarjee, Fin24

For bank account holders who have been victims of debit order fraud, banks have heard their concerns and have taken steps to prevent it.

The four major banks – ABSA, Standard Bank, Nedbank and FNB – have partnered with the Payments Association of South Africa [PASA] to stop unauthorised debit orders going off clients' accounts.

PASA's offering DebiCheck went live across 10 banks in August. It is a new type of debit order – which is confirmed 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 addition to DebiCheck, the big five banks have shared their remedies for debit order fraud:

Nedbank: Nedbank's MoneyApp has a feature for debit order management, which clients use to check their debit orders. "Besides the ability to view debit orders, clients can dispute, stop or reverse unauthorised payments, offering them the opportunity to completely change the way they manage and control their money," a spokesperson said.

Standard Bank: "In the unfortunate event that our customers experience unauthorised debit orders, they need to report it to Standard Bank within 40 days of the debit order being processed. Once this has been done, the bank will query the validity of the transaction with the company that debited the account," a spokesperson said. Account holders have to regularly check their bank statements and alert the bank of any unauthorised debit orders.

On the bank's digital and mobile banking platforms, customers are sent a One Time Pin for authentication purposes for any new instructions initiated by the customer, the spokesperson said.

ABSA: Apart from making use of DebiCheck, ABSA's Ulrich Janse Van Rensburg, head of fraud strategy assured that the bank's innovations and products are subjected to "strict control assessments" to ensure that offerings are safe and secure. "A stringent, layered control, mechanism is adhered to before the products or services are launched and consequently offered to the customers."

ABSA also advises clients not to share their card PIN, CVV number or One Time Pin. Customers should not share their internet pin or password either. Additionally, customers should not open hyperlinks to log on to internet banking and they should carefully read all bank communications and never approve any transactions, if they are not transacting.

FNB: FNB recently waived the fee to stop unauthorised debit orders through its electronic banking channels. Ryan Prozesky, FNB Consumer Core Banking CEO, said the bank is also monitoring and analysing non-FNB businesses that are processing illegal debit orders on customers’ accounts.

FNB customers are currently notified by SMS every time a new debit order is raised on their accounts for the first time. They can stop, dispute and reverse it if it is unauthorised. The bank also has a warning system to alert customers through SMS or App notifications of potential suspicious debit orders that are running.

Debit orders higher than R200 can be stopped or reversed via the contact centre or FNB branch at a fee – the majority of unauthorised debit orders have been found to be under R100 and the fee is also a measure to prevent customers from abusing the system, Prozesky explained.

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banking  |  debit order  |  personal finance  |  fraud
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