|Beware when selling goods
Cash deposit scams - see Retail Goods Syndicates under Security
Tips for Consumers at www.banking.org.za.
- Never accept a deposit slip as proof that
the selling price was deposited into your account.
- Have the bank confirm in writing that the
deposit was in cash before handing over the goods. A printed statement
showing a "cash"
deposit can also be satisfactory.
- Verify any cheque, whether bank guaranteed
or not, with the bank that issued it before handing over the goods.
cheques can be expertly forged to look like bank guaranteed
- Be wary of handing over the goods to a driver
or friend supposedly sent by the purchaser.
- Be wary of a purchaser who offers to pay the
selling price without having seen the goods.
Our office regularly receives complaints regarding credit cards.
We would like to bring a few aspects to your attention regarding the use
of these cards.
The constantly repeated warning that you should
keep a wary eye on your credit card cannot be overemphasised. It is imperative
that you constantly check to confirm that your card is your possession.
A basic term of your credit card contract that you have with the bank
is that you will be held liable for all purchases on the card (fraudulent
or not) until you have reported your card as stolen. We receive many complaints
from bank clients who are being held liable for purchases made on their
card after it was stolen from them and before they had reported it to
signature on the card
In the event that your credit card is stolen it can be used by
the thief to make fraudulent purchases. Your signature on the card is
not a total protection against fraudulent use of the card. An often-repeated
assertion by the victim of a stolen credit card is that the signature
on the voucher is vastly different to their signature on their card that
was stolen. Due to the various methods employed by the thieves and in
terms of the agreements between the banks and the merchants, the comparison
of the signatures only becomes a relevant factor once the stolen credit
card has been recovered. Then only can a comparison be done between the
signature on the card and that on the voucher. A comparison between the
card holder's usual signature and that on the voucher is not relevant
at all. Stolen cards are very rarely recovered.
A thief who has stolen your card can use it to make purchases
in excess of your credit limit, for which you may possibly be held liable
in terms of the conditions of the contract between you and the bank. Even
if you have already reached the credit limit of your card when it has
been stolen, the thief will be able to exceed that limit.
It is vitally important that you check your credit card statements
carefully as soon as it arrives. You only have 60 days within which you
must report any fraudulent or incorrect purchases on your card. Once this
60 day period expires you will probably have some difficulty in contesting
any incorrect debits.
When you dispute a transaction on your credit card statement (within
the time limit) the bank will request the merchant, from whom the purchase
was made, to produce the voucher of the transaction, which was printed
when the transaction was done. If the merchant is unable to produce the
voucher the bank will charge-back the transaction to the merchant. This
means that the merchant's account is debited and your account is credited
with the transaction amount. In other words the merchant then has to pay
for the transaction. If the merchant produces the voucher, the signature
on the voucher is compared to that on your card. If the two are reasonably
similar the transaction is confirmed. It may happen that the bank, immediately
on receiving your dispute, credits your account with the value of the
transaction. This is only done on a provisional basis. Once the merchant
has produced the voucher and the transaction is confirmed, the amount
will again be debited from your account.
In the event of a contractual dispute between you and the merchant,
paying by credit card can generally be regarded as a cash transaction.
For example, you buy a defective stove on your credit card and only find
out when you get home. The merchant refuses to repay you. You cannot dispute
the transaction with your bank citing the fact that the stove does not
work. The bank cannot involve itself in a dispute of this nature and will
not take any charge-back steps. The reasoning is clear, the bank is not
a court, and it cannot make a finding as to who is telling the truth in
such a situation.
- Make sure that you keep your cheque book safe
- Mark cheques "not transferable" where possible,
writing this boldly across the face of the cheque, preferable in red
- Begin writing the name of the payee and the
amount to be paid close to the left hand margin to prevent alterations.
- Use indelible ink when writing cheques.
- Any alteration on a cheque will result in
the bank not accepting it after 1 August 2001.
- "Not transferable" crossings cannot be cancelled.
- Always mark a cheque as "Not-negotiable" in
the crossing at the top left corner.
- Always cross out the words "or bearer/of toonder".
- Be wary of posting cheques. They are easily
intercepted and stolen in transit.
- Never leave spaces between any letters or
numbers written on the cheque.
- Always write out the full names of the payee,
including the description "Pty", "Ltd" or "CC" where applicable.
- Never sign a blank cheque.
- When building a home, do not sign consent
to progress payments before you are satisfied with the work done. Obtain
expert advice if
necessary, do not rely on the bank's assessor.
- If you are buying a renovated or older home,
it would be wise to obtain the services of an expert to inspect the
building. You cannot
rely on the bank assessor to do this for you.
- If you have paid up your bond, give the bank
firm instructions as to whether you wish to continue with existing insurance
- Most people only check their insurance cover
when it is too late.
- Check with your bank what insurance cover
you have in place on your bond account.
- Verify that you know the difference between
House Owner's Cover - which is insurance against damage to the property
Homeowner's Life Cover/Life Protection Assurance - which is insurance
against death or disability etc. It can look very similar on the
- In the case of a married couple or where the
bond is registered in two parties' names, ensure that both are insured.
- The onus is on you to ensure that the payments
are made every month to the insurance company.
Be aware when using an ATM
- Never allow anyone to stand near you or assist
you at the ATM.
- Never enter your PIN unless the ATM screen
prompts you to do so.
- Criminals involved in ATM scams will generally
come across as well-dressed and friendly - they are trying to convince
you to trust
- Avoid an ATM that does not easily accept your
card on the first attempt.
- Only use ATMs in safe and well-lit areas.
- Immediately report a card that has been retained
by the ATM for any reason.
- The ATM scam criminal uses sleight of hand
techniques to obtain your card and may try to convince you that your
card is in the ATM
and abuse your trust to allow him or an accomplice
to observe you entering your PIN.
- Ensure that your daily ATM withdrawal limits
are in accordance with your needs and appetite for risk.
Understanding the debit order
What are the advantages of a debit order?
A debit order is a convenient and relatively inexpensive method of
payment in terms of which a creditor routinely debits the bank account
of a debtor with a specific or varying amount in terms of an underlying
agreement entered into between the two parties. The debit orders system
satisfies the creditor's requirement that payments be made regularly and
timeously, and obviates the need for the debtor to ensure that accounts
are settled on that basis. Payment by debit order can be made in respect
of telephone accounts, gymnasium fees, loan repayments, insurance premiums,
installment sale premiums and similar transactions.
What are the dangers inherent in using a debit
The bank customer has to bear in mind that:
- Varying amounts can be deducted by the creditor
from his or her bank account if so arranged in the debit order authorisation,
example in respect of payments of a telephone account.
- Debit order authorisations often are not limited
to a specific period of time and could carry on indefinitely, for example
in respect of
gymnasium membership fees.
- Although debit order authorisations are usually
in writing, voice recordings are sometimes utilised which could lead
misunderstandings as to the terms thereof.
What happens if a customer has insufficient
funds in his or her account to meet the debit order?
The customer's bank will return the debit order marked "not provided
for" to the creditor's bank account. The creditor is allowed to re-submit
the debit order the following month. The creditor cannot, however, increase
the value of the debit order to recover arrears. Separate debit orders
have to be submitted by the creditor for current and arrear payments.
If a debit order remains unpaid on two occasions for lack of funds, the
creditor must remove it from the customer's account system unless the
creditor receives a new debit order authorisation from the customer to
meet future payments.
How does a customer cancel a debit order?
Since the debit order relates to an agreement entered into between
a creditor and a customer, the customer should inform the creditor of
the cancellation thereof in writing to prevent the creditor from placing
the debit on the account after cancellation. However, in order to ensure
that the bank does not pay the debit order should the creditor inadvertently
put it through the customer's account after cancellation, the customer
has to give his or her bank a written stop payment instruction. The customer's
bank is not entitled to give reasons to the creditor as to why the debit
order was stopped. In the event that the customer subsequently decides
to reinstate the debit order on the same terms and in the same format,
a new debit order authorisation has to be given by the customer to the
creditor, and the customer has to cancel the stop payment instruction
at his or her bank.
How does a customer amend a debit order?
The customer has to renegotiate the payment terms directly with the
creditor and provide the creditor with a new debit order authorisation.
However, in order to ensure that the bank does not pay the previous debit
order should the creditor inadvertently put it through the customer's
account after its amendment, the customer has to give his or her bank
a written stop payment instruction which specifically relates to the previous,
unamended debit order authorisation.
What does a customer do if an unauthorised
debit order goes through his or her account?
The customer must advise his or her bank in writing that:
- He or she did not authorise the debit in question.
- The debit is in contravention of his or her
- He or she has instructed the creditor to cancel
his or her authority. If the customer lodges the aforesaid complaint in
writing with both the
bank and the creditor within 40 calendar days
of the date on which the debit went through the account,
the bank will reverse the debit upon receipt of the complaint to the creditor's
bank account - whether or not the creditor has funds
available in the account.If
the complaint is lodged after 40 days, however, the bank has to give the
creditor's bank 30 days registered written notice of its
intention to reverse the transaction. If the creditor's
bank fails within this period to prove the validity of the transaction
satisfaction of the customer's bank, the latter bank will
reverse the transaction.
The bank's responsibility when any type of loan is granted to
a customer is to calculate the amount the customer is to pay on a monthly
basis. This amount includes interest and capital repayments.
If the bank makes a mistake in this calculation
resulting in the customer paying more than is due, the bank is responsible
to repay this to the customer.
If a customer approaches his bank and informs
the bank that he believes the bank has miscalculated the interest, the
bank may or may not decide to recalculate the amount. Recalculation
of interest charged over a long time period where there were several
different interest rates applicable is a time consuming, expensive exercise.
If the bank is convinced its own calculations are accurate it should
not be obliged to recalculate the figures at the whim of a customer
or on unfounded grounds.
However, if a customer is convinced that something
is amiss and hires a qualified person such as an auditor to make a recalculation
of the loan with the correct interest rates and the result shows that
the bank has overcharged, the bank should be liable to pay the amount
overcharged. In addition the bank should pay interest on this amount
as well as the reasonable fees incurred by the customer to have the
computation professionally recalculated.
What is a reasonable fee for this calculation?
Certain banks in the past have offered to recalculate mortgage loans
for a fee of under R1 000. Customers should enquire at their bank for
the cost of such a recalculation. The alternative is for the customer
to appoint an auditor to recalculate the loan. This is more expensive
but provides an independent assessment.
Beware of the so-called 'interest recalculators'
and the many other titles under which they operate. It is illegal for
these organisations to require the payment of an up-front fee for any
'recalculation' of interest.
Our office is not in a position to recalculate
any amounts. We also cannot assess whether a calculation made by an
auditor, interest recalculator or bank is right or wrong and we do not
give advice on such matters.
Building or renovating your home?
- Never sign blank progress payment forms. Check
the form carefully before signing. To whom will payment be made?
- Study the conditions of the bond carefully.
The contract may insist that a certain percentage of the building work
be completed with
your own money before progress payments from the loan
can be made.
- Insist on the progress payments being made
to yourself or to your own account. Never directly to the builder or
contractor. You can
then make payment to the contractor when you are
satisfied with the work done.
- The purpose of the bank's assessor is purely
to ensure that the progress payments are used for building work, he
is not permitted
to give you any advice or assurance as to the quality
of the work done and you cannot rely on any advice he has given you
Internet transfers and teller
- Verify the account number with the payee in
writing before making any transfer or deposit.
- The bank's system only uses the account number
for the transfer. It does not cross verify with the payee's name or
- A deposit to the wrong account may have to
be reclaimed from the account holder who received the money (using the
courts of law).
- A business must verify each account number
with each payee before authorising payments. Sometimes businesses are
their financial departments, which fill in the correct
payee's name but with their own account number. In these instances,
the manager authorising the payments only looks at the payee's name
and does not check that the account number belongs to that payee.
when purchasing a bank-repossessed or auctioned property
- The sale of such a property is usually "voetstoots".
You have little recourse if you subsequently discover structural problems
- Be aware that one may encounter difficulties
in having occupants of the property evicted. You may find yourself having
to pay a bond
on a property of which you cannot take possession.
- The tenant may be entitled to remove certain
items from the property when he vacates. The contract usually absolves
the bank from
liability for any items removed or damaged.