Unauthorised Debit Orders
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The complainant noticed unauthorised debit order amounts and approached the bank, which advised that he should contact the company deducting the debits. He did not do so. When he went back to the bank a year later, only then did it load a stop order on the account.
The OBS ruled that the bank's actions were unreasonable, as it should have applied a stop order immediately and should have found out whether the company had the authority to debit the account.
When the bank requested the mandate from the company, the contract was found to be fraudulent and, as a result, all the debit order deductions were invalid. The company refunded the debits and the bank, at the OBS's suggestion, offered a goodwill payment for failing to act timeously.
Lesson to be learnt
On noticing unauthorised debits, approach the bank , it has a duty to assist in verifying the source of the debits.