Sikonathi Mantshantsha Deputy editor: Financial Mail
Picture: REUTERS
Picture: REUTERS

Imagine a farmer who labours on the land the whole planting season, carefully tending the crops from which he hopes to earn a decent income. After expending more resources and energy to harvest the produce, the farmer packs it neatly and leaves it outside the farm gate for whoever wishes to help themselves to it. That would be beyond charity, an unthinkable deed of madness. The fastest way of sinking the farm. Yet that is what each of us do daily when we entrust our hard-earned income to a bank.

After diligently tending to the income-producing endeavour throughout the month, and like the mad farmer, we also dump it all outside the proverbial gate for all manner of creatures to help themselves. Unlike the farmer, we even pay the bank for the luxury of it displaying our wares for strangers to help themselves. For that is what the bank does when it facilitates fraudulent debit orders. For two years I have noticed the occasional odd debit order going through my long-held but soon-to-be-closed Standard Bank account: small amounts starting at R49.99/month, but never more than R120/transaction. The debit will go through on the busiest of days when all your legitimate creditors collect their dues at month-end.

The bank simply would not see that
it had any responsibility for the safekeeping of clients’ money

Only when you pay closer attention to the fancy reference number do you realise you’re being robbed blind. The bank, but only when you call, will readily reverse the transaction and give you the contact numbers of the thieves. (All this must be done within 40 days of the debit going off.) All the fraudsters need do is get your account number, then ask the bank to hand over their chosen amount. The bank requires no proof of your consent whatsoever. No questions are asked.

Last year I asked approximately 400 colleagues to check their bank statements. The responses revealed how prevalent the scam is. Many had never noticed the debits, for the amounts are “too small” for the bank to send a text message notifying the customer. Upon noticing an unauthorised R115 debit order last month, one visited a branch of Absa Bank and asked that the transaction be reversed. The bank happily agreed. But it also levied a R27 “dispute fee” on the victim of the scam — relenting only when the victim protested.

When I checked with Standard Bank this week why I was losing R69.99/month to a fraudulent debit, the bank preferred to use the term “unauthorised”. It vehemently denied any responsibility for the loss of my money. I was told it was my sole responsibility to ensure the safekeeping of the cash the bank holds for me. For that luxury I pay the bank a monthly figure determined by the bank.

‘No obligation’

“Contrary to public belief the bank has indeed no obligation to verify the authenticity of any debit order, and as such the bank merely fulfils the function of a payment facilitator where any debit order is presented for payment,” said Serisha Nagan, a manager at Standard Bank’s complaints resolution centre. “A debit order is an agreement between the account holder and an external company in which the customer would authorise such service provider to debit an amount from his/her bank account for services provided. A debit order is not a contract between you and the bank, and the latter is not a party to the agreement at all.” The bank won’t accept that in the absence of a signed debit order instruction authorising it to hand over the cash entrusted to its care, this is fraud.

After FNB’s safety deposit facilities were robbed, it pointed the victims to the terms and conditions of their safety deposit box rental contracts, which say the bank takes no responsibility for any losses and urges customers to take out insurance on their valuables. But they must first pay the bank for the “safekeeping” of the same valuables.

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