Money and Markets

Early debit orders in December draw fire – but SA banks say it’s ‘standard practice’

Business Insider SA
Early debit order December 2020
(Getty Images)
  • Debit orders for home loans, insurance, or vehicle finances may be processed earlier in December.
  • Banks say this is because South Africans are paid earlier in the month, and debit orders are aligned to salary dates.
  • But the opt-out function offered by some banks, to keep debit orders at their usual dates, has left account holders fighting reversals and penalties.
  • For more articles, go to

South African banks have come under fire for processing debit orders earlier than usual in December. But even as account holders express shock and frustration at curt SMSes notifying them of the date changes, financial service providers say it is common for accounts to be debited early in December.

First National Bank (FNB) was one of the first providers to be met with criticism ahead of the festive season, when clients received debit notifications by SMS and through the mobile application around 7 December 2020. According to FNB, and other banks, the rationale behind altering debit order dates is centred on earlier end-of-year payments in December.

While being paid earlier in December is common, due to account departments closing their books before the Christmas period, not all South Africans receive their salaries in the middle of the month. Additionally, account holders complain that their financial planning, taking into consideration the standard debit agreement, has been complicated by these changes which have been announced at the last minute.

“Where we have contractually agreed with a customer to align their debit order date to their salary date, we may adjust the debit order date in December as we know that many organisations pay employees earlier in December, leading up to the festive period,” said Kuben Gounden, the CEO of Retail Collections at FNB, in a public response to widespread concerns.

Gounden added that this practice, which is intended to keep clients’ credit profiles healthy, was common among financial service providers, and that FNB consistently notified account holders of any potential changes. This notification process – which informs, rather than proposes a new deduction date – has, however, been slated by clients.

Dissatisfied account holders argue that the opt-out method used by banks is a way of shifting responsibility.

In some instances, account holders are informed of the change and, if unhappy with the new date, are required to notify the bank. If the financial service provider does not receive an objection, the debit order will be processed according to the new date stipulated in the notification.

But challenging this has proven difficult for many clients, especially when the notifications have been received just a day or two before the debit order is due to be actioned.

Both Nedbank and FNB have, in reply to criticism on social media, confirmed that responses to early debit notifications are required. 

Capitec has also confirmed an early debit campaign, saying that an opt-out function would be built into the system in 2021. Until then, Capitec has encouraged account holders to refer to their contracts through the Debicheck system which allows for collection dates to be changed.

“It is contracted between the bank and the client that collection dates may be amended from time to time,” said Capitec’s Credit Operations team. “While a client's due date stays the same, we only move a collection date earlier if we know that the employee gets paid earlier.

“We use machine learning and predictive data models to determine if a deposit into a client's account is in fact a salary. Once this is established, we move a collection date earlier in order to help our clients honour their obligations and reduce the temptation to use the available money for holiday expenditure, which might put them in arrears.”

Cowyk Fox, managing executive of Everyday Banking at Absa, argues that the account holder’s permission must always been sought before adjusting debit order dates.

“These campaigns usually take place during December to give customers peace-of-mind knowing that their payments have been attended to before going on holiday,” explains Fox. “At all times, these arrangements are subject to customers granting consent. We would always seek permission from customers to move their debit orders forward.”

Clients who have received notifications from their banks are advised to contact the relevant departments as a matter of urgency. While challenging the adjustment may require spending time talking to a call centre, attempting to reverse a debit order – which, if processed when the account has insufficient funds, could incur an additional penalty – is much harder.

If you receive an SMS, email, or mobile app notification from your bank about a change of date for your debit orders, follow the prompts provided to object. If you have not yet replied to such a notification, or if you’d just like to make sure that your debit orders are due to be processed at the regular interval, you can contact your bank’s debit department as follows:

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