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The South African Reserve Bank (SARB) and the Financial Sector Conduct Authority (FSCA), in consultation with the South African Payments Association (PASA), have issued a warning to consumers to be aware of the risks associated with the use of instant electronic devices. online funds transfer (EFT) payment services offered at e-commerce stores
An instant EFT is a payment method offered by a third party that automates the initiation of payments for consumers to e-commerce stores and also provides immediate confirmation of payment to the e-commerce store to allow them to ship the goods or services purchased.
Instant EFT payments use a method called ‘screen scraping’, which enables third parties to access bank account data and automate actions on behalf of a consumer using that consumer’s online banking access credentials.
Access to data on the consumer’s screen is used to facilitate payments.
The SARB, the FSCA and the payments industry said they do not support the use of screen scraping to make payments, as it exposes consumers to the following risks.
Data privacy
The method of using screen tracking to make payments puts consumers’ login credentials at risk.
Consumers have no control over how the third party accesses and uses their credentials and any other personal data or information.
Account numbers and account statements can be stored and used without the consumer’s knowledge or consent.
Fraud risk
Dishonest entities can impersonate third parties offering instant EFT services on bogus e-commerce sites to capture consumer login credentials to their banks’ Internet banking websites.
From there, these entities can impersonate the consumer and carry out any activity that the consumer has access to on their online banking platform.
This includes making payments to themselves in real time, applying for a personal loan, increasing transaction limits, and ultimately initiating payments to mule accounts.
Dishonest entities can also access relevant data and personal information, such as account information and monthly statements, from which fraudulent charges may occur through debit orders.
Breach of contractual agreements
By providing their Internet banking login credentials to a third party, consumers using instant EFT products could be in breach of their banks’ terms and conditions that regulate Internet banking.
As a result, consumers could knowingly or unknowingly be giving up their recourse rights and any legal protections in the event of subsequent fraud and / or loss.
Risk of financial loss and loss of purchased goods Electronic fund transfer payments are final and irrevocable in nature, and consumers cannot file disputes to reverse a transaction in the event that the online store does not honor its agreement. , such as not delivering the goods or delivering counterfeit goods.
Consumers may also be held liable for interest payable on such amounts when payment is made from their credit card account or overdraft facilities.
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