Beware R99 debit order scam in SA
Innocent victims whose money has been disappearing from their bank accounts through mystery debit orders feel banks are not doing enough to safeguard their hard-earned cash.
Fin24 has been inundated with emails from irate bank customers following an expose on Special Assignment on Sunday which lifted the lid on how easy it is for dubious companies operating in the call centre space to gain access to bank accounts through unauthorised debit orders.
Not one of the big banks have been spared from criticism from the victims of debit order fraud.
Banks in the South Africa process about 56 million debit orders a month and from these close to a million inter-bank debit orders, including non-authenticated early debit orders, are disputed every month, according to the Payments Association of South Africa (PASA).
The dispute ratio for non-authenticated debit orders is between 4.5% and 6%. Some of these include debit order fraud.
This is what the victims had to say:
Lucas Mlangeni said it worried him that his bank account has been invaded by fraudsters. He approached his bank in September after noticing that R99 was being deducted on the 15th of every month by J&A Solution. “They also tried to deduct the amount on the 15th of October but it was rejected by the bank. I hope they are not going to try again this month.”
He appealed to the banks to ramp up security measures.
Noel Mthethwa, who has been a victim of debit order fraud “for quite some time”, claimed that the banks are not bothered about this fraud because they are also making money from the unauthorised debit orders.
“Even if you do recover your money from these so-called marketing companies the unauthorised debit order charge from the banking institutions is never reversed. This is a serious problem and the government needs to protect us.”
After being scammed, Steve said he was left with no choice but to close his FNB business and personal accounts. “I think some people in the banks are benefiting.”
Elrene du Plooy was also forced to close her bank account and open a new one. “I bank at ABSA and amounts of R111 and R68 were taken by debit order. When I went to the bank for help they just shrugged it off and said it happens a lot.
“I need to feel safe concerning my money. If someone wants to cancel a debit order it takes many requests and a lot of paperwork, yet if somebody steals from your account by debit order they can’t do anything about it.
“Don’t put the responsibility of the account on the account holder. This is not supposed to have happened,” she said.
Banks must take the blame
Another victim Collen Ncongwane from Mpumalanga emphasised that banks must take the blame. “They must make sure we don’t have money missing from our accounts. I believe the reason banks are dragging their feet on fighting what’s happening is because they benefit when we reverse transactions.”
Noma Sokanabohope said every month there are questionable deductions on her account. “I’ve been to FNB a number of times to query these deductions.”
Standard bank account holder Zelia Soares said she has had numerous deductions. “I get my money back because I contact the bank immediately. I think the banks should make it more difficult for these transactions to happen. The bank was not even interested in my concern. I even contacted the fraud department.”
For the past few months unauthorised debit orders have also been going off the bank account of Ncumisa Fandesi, who has been banking with ABSA for almost a decade.
She said the deductions were made with different names like Digi Cash, Gigima and ZwiZwe and ranged from R89 to R99.
“I don’t know these people and when I went to the bank to stop it, I was told I’m not the first one to attempt to stop it. I think my bank should protect my account and not tell me they can’t do anything about it. I must always come to the bank to reverse the debits. This is not fair.”
‘My R300 disappeared’
Reginald Greeff had a similar experience with ABSA. “I recently checked my savings account at ABSA and to my surprise I found almost R300 missing.”
He said when he approached the bank, he was told that they couldn’t trace who the company is or how they got hold of his banking details. “I wanted the bank to pursue these criminals, but I was told to rather empty my account so that these criminals can’t deduct again the following month. I wasn’t fully reimbursed and I am still angry with the bank!”
Anthony Mark said he has been duped for over two years. “Someone got hold of my Standard Bank account number and used it every month. The amounts differed from R99 to R99.90. I always had to go into the bank to get my money back. I would put a stop payment against that company’s name and the amount and the next month it would be a different name and amount.”
He said that Standard Bank indicated that they can’t do anything from their side except give him the name of the company and their contact details.
“The worst part was the police. I went to them to open a case and they said they could not help me because it was on the internet and therefore I could not give them a place where the crime took place. I tried three different stations. Neither the bank nor the police could help. I closed my account.”
Pietro Crestani said he has been struggling for months to stop a debit order of R99. “Standard Bank recovered the money but they can’t stop or control debit order deductions. This debit order fraud is the banks’ problem.”
Banks must request authororisation.
He said Standard Bank should not release any money from his account without his signature on an authorisation document. “Now anyone can submit a debit order and take money from my account and the bank does not question this transaction.”
A frustrated Hlengiwe Luthuli said she went to her bank because she is fed up. “In September it was R84 X 3. This month it’s R99.99. When I asked the manager why they don’t have security measures in place, she didn’t give me a convincing answer.”
Elizabeth Mabitle from Bloemfontein said funds were debited from her account to pay for a credit card that she knows nothing about. “Amounts of R840, R830, and R860 were debited from my account. The last debit was on 4 May 2015. I alerted my bank and was advised that the situation would be rectified. To this day I have not been refunded.”
Sindi Makhele said she had 14 unauthorised deductions on her bank account with amounts from R79.00 to R129.00 in the three months from July to September. These companies had references like DRZ Marketing and Mzansi Marketing.
‘They will come back and take my money’
“I think banks need to introduce a system to ask us to authorise such deductions. They need to notify us because I didn’t receive any calls from those crooks. My fear is they will come back and take my money.”
Another user who called himself SMG said he agreed that people are being ripped off by fraudsters and banks. “I have seen a situation whereby a Capitec client is disputing an amount of R19 while the bank fee for that is R20. These scammers can deduct R500 in splits of R19, R29, R49, R59 etc and at the end of the day when you dispute it, only the bank benefits.”
To stop companies and banks from “playing with people’s finances”, SMG suggested that they be slammed with penalty fees when deductions are made without any proof of agreement.
“I think that it’s time for all banks to confirm with the account holder before they process any debits from his/her account,” said Richelieu Mthethwa.
“This can be done by linking SMS with capturing debits. The account holder will then be alerted by SMS when a debit order has been charged against his/her account.”
He said he has experienced a lot of unauthorised debits on his account and it was all less than R100. “Some banks’ cellphone notifications don’t report anything less than R100. Fortunately my bank managed to suspend these debits and reversed the amount that was already debited for that month. It was close to R400 with different reference numbers.”
Johan Labuschagne said he has been scammed by four different companies – Mutual Direct, TeleSA, Real Life Style and Hemisphere Life – during the period June 2014 to October 2015.
“So far I managed to get all my cash back but I got no support from Nedbank. They only told me that they investigate credit card fraud and debit orders have nothing to do with them as it is between me and to whomever I give permission to take my money.
“I even asked them to get their system to send out an SMS when a new debit order is loaded with a simple ‘yes go ahead’ or ‘no, I do not know this’ option to try and stop this. They already do this on their internet service where I have to confirm transactions that I am doing on my own account with my cellphone,” he said.
The South African Banking Risk Information Centre (Sabric) urged bank customers to always scrutinise their bank statements and to report any discrepancies to their banks immediately.
“They must immediately report the matter to their own bank who will advise them on the process to follow in order to dispute the transaction,” Sabric acting CEO Susan Potgieter told Fin24.
She said customers must also help to protect themselves by:
– Protecting your personal information at all times and be selective with whom you share it.
– Subscribing to your bank’s SMS notification services; this will inform you of any transactional activity on your account.
– Reviewing your account statement on a regular basis and query disputed transactions with your bank.
* So what are the banks doing about debit order fraud? Fin24 has approached all the banks named by users and will publish their comments.