DebiCheck (Full Effect) Pushed Back By a Year
The authenticated payments project which has come to be called DebiCheck (it sounds cooler) plans to make it harder for crooks to load debit orders and harder for consumers to query debit orders.
Full implementation of the process was targeted for October 2019 but has now been moved by the SARB to October next year as a more realistic goal.
The 12 month delay really only applies to turning off old payment systems and not the start of the change. The main 11 SA banks and many others are moving ahead with implementation this year and consumers will soon have to start electronically confirming debit order information.
Consumers Abuse Debit Order Queries
Many consumers abuse the process of querying a debit order in order to get the payment amount back into their account and then foolishly spending that money. The consumer then faces penalties for late payments etc and legal action from credit providers. This rather stupid practice by some unreliable lenders hurts the cashflow of their credit providers and only offers these consumers a momentary relief before making their situation much worse off. This type of abuse has even been seen in the debt review space (where consumers should be focused on paying off their debts) and can and does often cost consumers the protection of the debt review process (and court order).
At present, the various Payment Distribution Agencies (who handle debt review payments for consumers to their credit providers) face huge issues due to this behaviour and are being hurt by this practice. This practice is exposing them to huge risks and large costs due to the timelines for handling funds set out by the Regulator and DTI.
‘Part of the intent of DebiCheck is to try to reduce this bad consumer behaviour’
Part of the intent of DebiCheck is to try to reduce this bad consumer behaviour. Debt Counsellors can also help protect their clients from falling out of debt review by educating them about the many negative consequences of dropping out of debt review half way through the process.