South Africa’s FNB raises alarm over new debit order fraud

JOHANNESBURG (Capital Markets in Africa) – South Africa’s First National Bank. FNB has said that it has detected abnormally high volumes and disputes of suspicious debit orders with descriptors Procall and Mzansi in December 2018 and January 2019.

In line with its standard practice, the Bank has informed customers of new debit orders loaded on their bank accounts. In addition, and based upon the monitoring of debit order disputes, FNB has detected that a large number of customers are disputing Procall and Mzansi debit orders using the FNB App and Online banking, among other channels.

As part of its investigation, the Bank contacted a number of customers in order to validate the debit order mandates provided by Procall. The feedback from customers was that they had not given authority for the debit order.

Dr Christoph Nieuwoudt, Chief Executive of FNB Consumer says, “Our investigations have provided sufficient proof that the impacted customers had not provided a mandate for the debit order and as result, the debits to customer accounts were unauthorised. FNB is proactively reversing all Procall debit orders including any associated charges and we are working with the corresponding bank to reverse all Mzansi debit orders. We are working with the Payments Association of South Africa (PASA) and the South African Banking Risk and Information Centre (SABRIC) on the matter and will be pursuing criminal charges.”

“In conjunction with the relevant partners, we are deploying analytical, forensic and legal expertise to protect our customers against unauthorised debit orders. We apologise to impacted customers for the inconvenience caused and encourage them to regularly review their bank statements for any abnormalities,” adds Dr Nieuwoudt.

Walter Volker, CEO of PASA says, “Industry players will not allow any behaviour that undermines the efficiency of our country’s world-class payment system. Alongside efforts to continuously improve the efficiency of the overall payments system, we are consistently working with financial institutions and other partners to clamp down on debit order abuse.” Currently, FNB customers can stop, dispute or reverse unauthorised debit orders of less than R200 for free on the FNB App, Online Banking and cellphone banking for those who do not have access to the internet and smartphones. In addition, the bank notifies customers via SMS every time a new debit order is raised on their accounts, with the ability to stop, dispute and reverse it.

FNB App registered InContact users receive alerts for all transactions regardless of the amount, giving customers full visibility of all monthly debit orders processed against their accounts.

Along with the notification system, the bank’s electronic platforms allow customers to view the current debit orders that are running off their account as well as the ability to stop, dispute and reverse the ones they believe are unauthorised.

Debit orders that are higher than R200 can still be stopped, disputed and reversed via the FNB contact centre or at any FNB branch. While every case is treated on its individual merits, debit order disputes above R200 may incur a fee to prevent potential abuse such as the reversal of legitimate debit orders.