In the wake of our most recent article on rogue debit orders, How To Steal A Hundred Billion Rand, PASA (Payments Association of South Africa) has responded with a press release entitled Are the R99 debit order scams with us for another year?
PASA is the industry watchdog that oversees and regulates debit orders in South Africa.
This is not the first time this blog has looked into unsolicited debit orders. Just last year, Jo Stolp wrote the first article on this topic. After that article, her initial calculation of R1.6 billion was extensively mentioned in other news sources.
DebiCheck, the system which was implemented to police rogue debit orders will only come into full force at the end of October 2021 when all companies will have to comply with the system to load new debit orders. Currently two different systems, called AEDO (Authenticated Early Debit Order) and NAEDO (Non-Authenticated Early Debit Order) will be migrated onto the DebiCheck platform. However, according to PASA, there is no need to worry about rogue debit orders until then.
The DebiCheck system, which has been live since August 2018 allows consumers to confirm debit orders directly with their bank. Most banks have already integrated this feature with mobile and online banking apps. A legitimate company should have a valid mandate to debit a consumer’s bank account. According to Maurits Pretorius from PASA, around 5.7 million DebiCheck debit order transactions are currently being processed through the system, with 366 companies who have fully implemented the new system thus far. This is around one third of all NAEDO and AEDO debit orders, which together were 200m transactions in 2018 at a value of just under R200b. PASA remains silent about ordinary (non-early) debit orders, 450m transactions to the value of R800b in 2018.
To date, PASA has removed 291 rogue companies from the system, representing a total value of R3.39 billion according to Andre Strydom, Head, Debit Order Business at PASA.
PASA also says that the screening process for companies to be included in the DebiCheck system is more stringent.
Although these measures have had an impact on the scourge of R99 rogue debit orders, there is still some room for improvement as this is a long way off from our R100 billion calculation.
We look forward to seeing the news media reporting on this and verifying our figures and claims.
Press release: PASA Media statement – DebiCheck and Debit Orders_May2020