Results 1 to 9 of 9

Thread: Unauthorised debit orders - can someone explain the logic behind the system?

  1. #1
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts

    Unauthorised debit orders - can someone explain the logic behind the system?

    I just cannot understand the bank debit order system.

    All someone needs to take money out of your account is your account number. They do not need your authorisation, they do not need your signature (they should have these things, but they do not need them), they most probably do not even need you bank account holder name. All they do is send off your bank account number on a debit order run. The funds are then withdrawn from your account.

    If you never authorised this withdrawal, then:

    - you still have to pay the R20 bank charges for the transaction.
    - you then need to pay R23 to get the information as to whom took your money and to stop the transaction.
    - you then need to spend time contacting the recipient and ask them to reverse the transaction from their side - the last time I did this it involved 2 call centres (3 if you count the bank).

    There is no may of stopping this happening again if they change anything in the debit order reference.

    So essentially the bank will allow almost anyone access to your funds and they will do nothing to protect you from something similar happening again, and best of all they will charge you for allowing this and for not preventing it in the first place.

    Can someone pleeeezzz explain to me the logic behind this system?

    PS: Some street wise ideas on how to prevent this will be useful too. But keeping your account number secret is not practical for a business.

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by BusFact View Post
    So essentially the bank will allow almost anyone access to your funds and they will do nothing to protect you from something similar happening again,
    "Almost anyone" might be stretching things a bit. Have you ever tried getting debit order facilities from a bank for your business? They don't give it away easily - which is what has opened the market to the intermediary market.
    The trouble with opportunity is it normally comes dressed up as work.

  3. #3
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    2,671
    Thanks
    88
    Thanked 544 Times in 460 Posts
    Blog Entries
    1
    Not anyone can create a Debit Order run. You need to register your business with the bank, and then have a deposit which you can not touch, equal to the amount of the Debit order run.
    So it is not as if the bank does not know who is meddling in the accounts, as they have all the info.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

  4. #4
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    3,437
    Thanks
    660
    Thanked 765 Times in 630 Posts
    Blog Entries
    1
    The banks are changing the system so that authorization will be required before a debit order is activated.
    In future, no new debit orders may be acted upon without confirmation and authorization by the account holder.
    Excellence is not a skill; its an attitude...

  5. #5
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts
    Not true, Blurock...

    The Guvmint has foisted that on the banks - which is the same in the end, but they were reluctant to do it themselves...

    Regards

  6. #6
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts
    @Dave A and @Justloadit, yeah you guys are right, its probably not easy for "anyone" to do it. So perhaps large fraud is not so much a threat. However the system remains open to abuse, even if the source of abuse is incompetence, errors or cynical marketing tactics - rather than outright fraud. I mean, how many of these debit orders are for obscure insurances or initiated by marketing agencies or from call centres? We're hardly talking about an overly ethical group here.

    As a consumer, the end result in terms of hassle remains pretty much the same. It is a ridiculous system IMO. How on earth can the bank release funds from my account without my authority or without the authority of a court of law, and then charge me to correct their error or that of their customer. The fact that they control access to this system makes it worse in my view. It means they endorse it. I still don't see the logic behind it.

    @Blurock, when is this likely to change ? Sounds much more sensible.

    @Phil, well if guvmint are forcing the banks to correct this ridiculous system, I may just have to vote for them

    In the mean time I think I will start some research on the process for setting up a debit order run on Sim Tshabalala's account. Something with a medical reference, you know - getting some of his own medicine

  7. #7
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts
    Why not on Zuma's account?

    Get your portion of the Nkandla taxes you contributed back, and with all the millions going in, he will probably not even NOTICE a few thousand rands?

  8. #8
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by BusFact View Post
    It is a ridiculous system IMO. How on earth can the bank release funds from my account without my authority or without the authority of a court of law, and then charge me to correct their error or that of their customer.
    Unfortunately it's not the only place where the banking system places the charge at the wrong door in my opinion - the cheque deposit fee is another example of opportunistic billing injustice.
    The trouble with opportunity is it normally comes dressed up as work.

  9. #9
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts
    I agree Dave. I have no issue with them charging me as much as they want for a cheque book, but to make me pay because someone else chooses to use that method of payment - something that is very difficult to control - is problematic.

Similar Threads

  1. [Question] Unauthorised bank debit order
    By BusFact in forum General Business Forum
    Replies: 8
    Last Post: 18-Sep-15, 02:16 PM
  2. [Question] Notional input tax Please explain
    By Sumayak24 in forum Tax Forum
    Replies: 0
    Last Post: 19-Jun-15, 08:35 PM
  3. Replies: 84
    Last Post: 25-Jun-14, 11:24 AM
  4. Year end with open sales orders/purchase orders
    By TanyaFourie in forum Accounting Forum
    Replies: 4
    Last Post: 06-Mar-14, 07:30 AM
  5. Wife logic
    By adrianh in forum General Chat Forum
    Replies: 4
    Last Post: 13-Jan-13, 12:11 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •