Debit Orders

EFT Debits

• What is a debit order?

  A debit order is a facility whereby a third party (the beneficiary) can collect money from your bank account without you having to do anything other than giving such person a written, telephonic or electronic mandate to so. Debit orders are payment instructions typically used for the monthly collection of premiums on investment policies, subscriptions, etc.

• What is the difference between a debit order and a stop order?

  A stop order is an instruction that you issue to your bank to make a series of future dated recurring payments, whereas a debit order is an instruction that you provide to a third party.
  
  

  Characteristic	Stop Order	Debit Order
  Type	Credit Push	Debit Pull
  Mandate	Held by the issuing / paying bank	Held by the third party beneficiary
  Amount	Fixed	Flexible
  Item or transaction limit	R 5 million	R 500 000

• What is the difference between a debit order and an early debit order (EDO)?

  Both debit orders and early debit orders are facilities that allow for a third party to collect money from your account. An early debit order is simply processed immediately after a credit payment (e.g. after your salary is processed, the early debit order is processed against your account).

• Can I dispute an unauthorised debit to my account?

  Yes you can. The customer has the right to dispute any transaction he or she believes was incorrectly debited to the account.

• What are the rules relating to Debit Orders mandated by Voice Recording?

  A Voice Recorded Mandate means the consent given by an accountholder allowing a third party beneficiary (the “EFT User”) in possession of such voice recorded mandate the ability to initiate payment instructions.

  The PASA rules are that such a mandate must conform to the following minimum requirements:

  • The account holder must be notified in writing within 30 days of the voice-recorded mandate being authorised and prior to any debit being processed to the account of the accountholder in terms of the mandate.
  • Although voice-recorded mandates are valid mandates, banks will not become involved with any process to prove the existence of voice-recorded mandates to accountholders for the purpose of resolving disputes.

• How do I dispute a debit order transaction?

  Your first recourse is to the party with whom the debit order was signed or the party that has submitted the debit order for collection to your bank. Only if this course of action has proved to be unsuccessful, may you approach your bank to dispute the debit order. This is achieved by signing a dispute form at your bank, in which you declare the reason for the dispute.  

• Under what circumstances may I dispute a debit against my account?

  You may dispute a debit against your account for the following reasons:      

  • You did not authorise the debit in question (this could be regarded as constituting fraud and should be reported to the police); or
  • The debit is in contravention of your mandate (to the user) – e.g. amount, date, duration is incorrect; or
  • You already instructed the user to cancel the mandate; or
  • The authorisation has been cancelled by you.      

• Is there a fixed timeline in which to dispute a debit order transaction?

  No, the timeframe for dispute is open ended. You have a period of 40 (forty) days in which your bank will immediately credit your account and return the debit to the user (that is the person or beneficiary that debited your account).If you raise a dispute after 40 (forty) days, your bank will send a written request to the user’s bank to provide proof of the mandate (that is the agreement between yourself and the user). Should the user be unable to provide proof of the mandate to the satisfaction of his bank proof of the mandate within 30 (thirty) days the debit will be returned and your account will be credited. If however, the user provides his bank with proof of the mandate, you must settle the dispute directly with the user.

• Can I cancel a Debit Order in its entirety?

  Yes. If you wish to cancel a debit order, you must contact the user / service provider, with whom you have contracted the agreement. 

• What is my responsibility with respect to debit order mandates granted?

  The granting of a mandate to a user constitutes a formal agreement between you and the user to allow collections from your account, and you would be obliged to honour the agreement in terms of Common Law principles by either:      

  • Making funds available in your account to meet the obligation (you need to ensure when signing a mandate that it is for a date when there will normally be funds in the account); or
  • Contacting the user / service provider to make alternative payment arrangements other than debit order; or
  • Cancelling the arrangement if unable or unwilling to meet the obligation.            

  When agreeing to such an arrangement you should further ensure that limitations are placed on the maximum value per collection and where an escalation clause (e.g. inflation increase on insurance premiums) exists that it is fully understood. 

• There is a debit against my account, but I do not recognise the source. How can I determine the originator or beneficiary?

  Your bank will be able to tell you where the debit originated from. All users are required to register a unique Abbreviated Short Name (ABSN), which should appear on your account and which each bank branch or call centre agent would have access to, and from which they can determine the full description of the company involved.

• What is an “unpaid” debit order?

  An unpaid transaction is a debit order (EFT Debit) which has been cleared through the system, but subsequently rejected or “unpaid” and reversed due to a variety of reasons, such as insufficient funds, account closed, account blocked, etc.

• How can I prevent paying penalty fees for a rejected or unpaid Debit Order on my account?

  Firstly, ensure that your account has sufficient funds available at the time that the debit order(s) will be processed by your bank. Secondly, be sure that the beneficiary company submits the debit order(s) on the correct date, matching as closely as possible the payment of your wages or salary – this will assist in ensuring the previous measure. Thirdly, ensure that any expired or invalid debit orders have been terminated by the user or beneficiary.

  Finally, if you are experiencing continuous problems with penalty fees, request the beneficiary or user to convert your debit order to an Early Debit Order (EDO) – which is described below.