Criminal syndicates have withdrawn more than R1bn by illegally debiting people’s bank accounts. This is according to a probe conducted by the SAPS, the Hawks, the Financial Sector Conduct Authority (FSCA), the South African Reserve Bank (SARB), Payment Association of South Africa (PASA), the Financial Intelligence Centre (FIC), and the South African Revenue Service (SARS).

Around 55 million debit orders to the value of R80bn are processed by the country’s banks every month. Tim Masela, head of the national payments system at the South African Reserve Bank (SARB), confirmed that the SAPS and the Hawks are assisting with investigations. He confirmed that the DebiCheck system, designed to curb the widespread illegal deductions is being rolled out by banks. DebiCheck allows consumers to approve debit orders before they are deducted. PASA CEO, Walter Volker, said DebiCheck had cost about R5bn to engineer.

“DebiCheck will stop scammers from illegally debiting the clients of banks. The permission of customers is required to approve any deductions from their accounts. Instead of signing a debit order or doing a voice mandate to a call centre, the service provider will send an authentication request to your bank electronically. The bank will require consent for the transaction to be processed. The message will come through on your cell phone. You can approve or reject it,” said Volker.

He said if 50 percent of the clients reject the debit order request, banks will blacklist the ‘company’ which requested the debit order. While almost 500 ‘companies’ have been blacklisted, the blacklisting has not proved effective because after the scammers shut a ‘company’ down, they open others.

Volker said DebiCheck will help regulators to track down the scammers.”A stringent vetting process is in place. We are looking at who are running the ‘companies’ . When ‘companies’ are shut down and others are registered, stern action will be taken,” he said.

According to PASA, about 1,5 million disputes are received every month, of which about 60% are ‘cash flow management’ issues and legitimate debit orders. Francois Viviers, the marketing and communications executive of Capitec Bank said: ” To protect our clients from illegal debit orders, Capitec has reduced the minimum value that triggers an SMS notification from R100 to R30 so that clients are informed of smaller debit orders on their accounts.”