First National Bank’s (FNB) ordered a series of unauthorised debit instructions to Absa that affected 7 000 bank accounts last Friday (15 March).
According to Absa's head of retail banking, Arrie Rautenbach, FNB submitted the debit instructions to Absa as part of their routine nightly interbank instructions.
“These files were duly executed by Absa as required by South Africa payment rules. Subsequently it became apparent that some of these FNB instructions were not authorised by Absa customers. The FNB error led to customer inconvenience and resulted in customers' accounts being overdrawn. The submission of unauthorised debit orders is a contravention of the rules of the Payment Association of South Africa,” said Rautenbach.
He added that Absa and FNB were working together to reverse these unauthorised entries which will result in credits deposited into customers’ accounts.
“This credit is to offset any debit that FNB raised last Friday. Any customer that has already disputed the unauthorised transactions will already have received their credit. FNB has apologised to Absa for the event,” said Rautenbach.
FNB transaction reversals
FNB said they had identified a small batch of payments, being processed in one of their payment systems, which had been duplicated. While correcting this error, 7 000 clients were affected. FNB customers, who made payments, were not negatively affected as the excess funds were not drawn from their accounts.
“The recipient would have noted a double payment or credit into their account. We reversed these transactions during a scheduled batch run on Friday night (15 March). We wish to state that the recipients of these double payments were not entitled to spend the excess payment by which they were unduly enriched to begin with,” said Lee Anne van Zyl, CEO of FNB Online.
FNB also noted that a number of these payments exceeded the time limits in terms of reversal process, which caused an inconvenience to other banks’ customers. However, she added that these funds remain due to FNB and the bank will continue to recover these funds.
“We are engaging with affected banks and will ensure that the correct process is followed in terms of collecting the funds from the relevant recipients,” said Van Zyl.
Absa’s 2012 debit glitch
Last year Absa was also on the receiving end of frustrated customers when technical errors caused late debits to Capitec's clients’ accounts. Fin24 reported that all the late transactions were made at Absa-supported card machines from 13 December until 18 December 2012. Due to the technical error, these payments were not authorised until the morning of January 6 this year.