In Ryts 13 we advised that in this issue we would be looking at Unauthorised Debit Orders. This we will do. However, it is also opportune to also look at the role of an Ombuds which we do below. In January 2018 the Ombuds for Banking Services South Africa published Bulletin 11 Debit Orders. In this publication it referred to “The Code of Banking Practice (Code) and the PASA (Payments Association of South Africa) rules indicate how the bank should handle a debit order dispute”.
Let’s just reflect here that at Ryts we remind you that Acts on there may not give you the whole story. Codes and the like are also vitally important, where applicable. The Code of Banking Practice notes that the Code is a voluntary code that sets out the minimum standards for service and conduct you can expect from your bank with regard to the services and products it offers, and how we would like to relate to you. The Code only applies to personal and small business customers. Whilst the Code is voluntary, and an Act is mandatory it still has major effectiveness.
The ombuds bulletin can be found at;
https://www.obssa.co.za/wp-content/uploads/2018/02/Bulletin-11-Debit-Orders-Final-30.01.2018.pdf
The Code deals with Debit Order in section 9.4. Referring,
9.4 Debit orders We are committed to improving our systems to ensure the reliable operation of the debit order system, the prevention of unauthorized debit orders and the reliable stopping of debit orders where instructed.
9.4.3 Stopping a debit order You must cancel a debit order by providing written or other appropriate notification to the third party whom you authorized to make the deductions. You may also stop a future debit order payment for a given period by requesting that your bank places a stop payment instruction on your account. Your bank will advise you regarding the period for which the stop payment instruction will be effective, and how it operates. You may also be charged a fee for implementing this stop payment instruction. You must be aware of any impact cancelling or suspending a debit order payment may have on your contractual commitments with the third party.
9.4.4 Disputes about debit orders. You should report any disputes relating to your debit order to your bank. In particular, you should raise a dispute when the third party:
∙ has withdrawn an amount before the date specified in your instruction;
∙ continues to collect a debit order that you have cancelled or is subject to a stop payment instruction;
∙ debits your account for an incorrect amount;
∙ has collected a debit order you did not authorise or in a manner you did not authorize (e.g. split the collection amount or consolidate several debit orders); or
∙ has collected a debit order that is not consistent with your instruction. Your bank may request you to provide proof of identity and to confirm the dispute.
If your bank determines that the debit order is not authorised by yourself, your bank may reverse the transaction and any related fees. You will not be able to dispute a debit order if the authorisation was done by you using your debit card and PIN.
