1. What is a debit order?
A debit order is a facility whereby a third party 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.
2. What is the difference between debit order and 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.
3. What is the difference between a debit order and an early debit order?
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 close to a credit payment (e.g. after your salary is processed, the early debit order is processed against your account).
There are two types of early debit orders:
- An Authenticated Early Debit Order (AEDO) enables accountholders to mandate the contracted future dated early debit orders through the use of their bank cards (e.g. debit card) and PINs.
- A Non-Authenticated Early Debit Order (NAEDO) would allow qualifying service providers and consumers transacting with such service providers the equivalent benefit of AEDO, however without the PIN authentication requirement.
4. 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.
5. How do I dispute a 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.
You will require the following documentation:
- South African bar coded ID document
- Your account number
- Your bank statement (if disputed debit order appears on it)
- Copy of your debit order mandate (if available)
6. 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, 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.
7. Is there a timeline fixed to dispute a 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 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 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.
8. 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. If such user continues submitting the debit order after the notice of cancellation, you should lodge a complaint with your bank, and register a stop payment instruction (as in process described above).
9. Can I stop a legitimate debit order prior to it being debited to my account?
Yes you can stop a debit order, prior to the collection date. However in practice the debit order will still be reflected on your account, but your bank will automatically return the debit on the same day.
Information required by your bank for stopping such a debit order includes:
- The exact amount
- The reference number
- The beneficiary name
- The collection date
- Frequency and term
If some of the above is not available then the stop payment process may not be effective.
10. 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. 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.
11. There is a debit against my account; I do not recognise the source.
Your bank will be able to tell you where the debit originated from.