Personal-Finance

Telephonic deals are dangerous

2016-05-05 09:49

Concerned readers have questions on telephonic scams and mortgage payments. Maya Fisher-French answers them all 

Max writes:

I was called by a company that promised to send me a discount card which I could use for airtime, electricity and groceries. I asked for a written offer so that I could check their address and contact details.

Soon afterwards, an amount of R258 was deducted from my account. I quickly called to inquire about the card and they promised to get back to me, but never did.

Now they do not answer their phones. I subsequently gave my bank, Absa, instructions to stop the deductions, but they changed the deduction date and company name, and the debit orders keep going through.

City Press replies:

This type of telephonic product selling is not uncommon, and often consumers do not realise what they have agreed to.

Do not provide anyone with your banking details telephonically. Take time to read through the information and find out if the company is legitimate.

A Google search or checking out the Hello Peter website (hellopeter.com) will inform you if others have had issues with the service provider.

City Press brought the matter to Absa Bank. They investigated and found that the client did show interest in the service offered and agreed to take it.

The issue, however, is whether or not the company has delivered on its services. Absa is awaiting an investigation by the company to provide proof that the service was delivered.

The problem is that the bank, in this case, is not a party to the agreement. Under the current payment rules, the contract for a debit order lies between the person who has bought a service or product and the company that has sold them that service or product.

The bank merely facilitates the payment between the two parties.

In this case, the correct channel to pursue would be lodging a complaint with the National Consumer Commission as the service provider has breached the Consumer Protection Act by not delivering on the services promised.

This, however, does not mean that one should not raise a complaint with the bank as well, as with the Payments Association of SA.

There are far too many unscrupulous companies abusing the debit order system. Therefore, to maintain the integrity of the system, the banking industry needs to ensure that those who access it do so in an ethical manner.

If numerous complaints are raised about a service provider, the payments association has the ability to investigate and remove the service provider from the debit order system.

If you believe you have unauthorised debit orders going off your account, contact your bank and the payments association at pasa@pasa.org.za.

Your bank has an obligation to refund unauthorised debit order transactions that are reported within 40 days.

Absa has introduced a first-to-market free online tool that allows its customers to reverse unauthorised debit orders at no cost within the first 40 days.

The tool is available on the Absa online banking portal and therefore does not require customers to go into a branch.

Should I cancel my mortgage? 

Morake writes:

A friend of mine’s home loan is nearly paid off and she wants to know if she should close the account or keep it open. What is the procedure for closing a mortgage? Do you have to pay transfer duties to get the title deed?

Calvin Ndlovu replies:
Ndlovu is head of operations at FNB Home Loans

There is no fee for the actual title deed, but there is a fee payable to the attorney for cancelling the bond.

The title deeds are held in safe custody by the bank, and only on confirmation from the attorneys that the bond has been cancelled in the deeds office will the title deeds for the property be sent to the client.

The time taken to cancel a bond in that office varies according to each office around the country, but my attorneys tell me that at the Johannesburg and Pretoria deeds offices, the following timelines apply:

. Once lodged in the deeds office, the cancellation takes 10 to 15 working days to go through.

. When the cancellation is lodged in that office, it contains the supporting documentation, as well as the original title deeds to the property.

. The title deeds are then endorsed with the phrase “bond cancelled”.

. It then takes the deeds office four to six weeks to return the title deeds to the cancellation attorney.

. The attorney will then return it to the bank, which will forward it to the customer.

City Press replies:

A mortgage facility is a very inexpensive form of credit and there could be a benefit to keeping this facility available for future borrowing. 

Moreover, there are costs in registering a bond on the property again in the future.

This does, however, come with a serious health warning: the reason you pay less interest on your home loan than other forms of credit is your house is used as collateral.

You do not want to be in a position where you are using the mortgage facility to fund holidays and lifestyle expenses, and risk losing your home.

It could, however, be used to purchase a car, for example, at lower rates – but you must pay this off over four or five years and not the 20-year life of a mortgage.

It requires a great deal of discipline and if you feel you would be tempted to dip into it for nonessential items, it may not be for you.


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September 23 2018