WENDY KNOWLER | Bank charges on transactions, when a credit card is better than EFT & cancellations

In this weekly segment of bite-sized chunks of useful information, consumer journalist Wendy Knowler summarises news you can use:

You may not think you’re making an international purchase, but your bank fee says otherwise

When Dhes Mari booked accommodation in Cape Town recently, he was expecting to see the payment of about R100,000 reflect on his FNB credit card. What he didn’t expect was another fee of R2,000 relating to the same booking.

“It was an international transaction fee levied by FNB,” he told me. “At no stage was this charge flagged during the transaction and I’m wondering how customers are ever meant to detect where these hidden charges may apply.

“This happens for Netflix too — though the quantum is a lot less so I didn’t notice previously.

“Interestingly, my other bank — Standard Bank — say their fee for this type of transaction is capped at R800.

“I’m sure many clients are not aware of the full range of overseas-based vendors which attract this fee,” Mari said. “Given that e-commerce platforms thrive on price sensitivity, it is unbelievable to me that this veiled fee exists ... and can wipe out any savings.”

International payments are those made to businesses that are not collecting their revenue in South Africa, including point of sale swipes, online purchases, virtual cards and the likes of Samsung Pay, Garmin Pay, and Apple Pay.

The transactions can be in a foreign currency as well as in rand, the most common ones being Netflix, Airbnb, PayPal, Apple Itunes, Booking.com, Google, Amazon, Facebook, Bolt, Spotify, YouTube, Microsoft and Alibaba.

Though quoted in rand, they are linked to international companies, and therefore the banks — most of them — deem them to be international spend.

As FNB told Mari: “The bank is incurring costs of international transactions and thus they are deemed to be international transactions.”

FNB absorbed them in the past, “but with increasing e-commerce and international spend”, the bank regarded that as no longer viable and from July this year began charging a fee of 2% for all international transactions, including rand-denominated ones.

“Communication on the annual fee review was done via the FNB app, SMSs and direct mailers to customers,” the bank told me.

All the banks, with the exception of Discovery Bank, charge an additional fee for subscription services, regardless of the currency they are billed in.

But the fees and their application vary from bank to bank, so it’s worth checking — especially if you frequently make large payments on any of those international platforms.

Before you order that must-have gizmo online...

A Port Shepstone pensioner, wanting to mitigate the effects of load-shedding — a desire shared by the entire nation — recently went online in search of an inverter.

He found one on the site of a Johannesburg retailer, and paid just over R7,000 for it, having opted for a R255 discount for paying by EFT instead of credit card.

That’s a red flag — never fall for this.

If you pay by credit card, you can apply to your bank for chargeback if you don’t get what you paid for. Merchants know this, hence most prefer EFT.

What the pensioner didn’t spot in the online listing of that inverter was a tiny word at the bottom: “backorder”.

The company’s Ts and Cs state: “Please note if a product is on back order, it is an item that is not in stock, however we are giving you the option of placing your order on back order and placing your name on the back order list for that particular item.

“We humbly appeal to you, please do not place your order if you are not patient to wait. An estimated time of arrival is not definite time of arrival.”

Who would knowingly agree to those terms, especially in the case of a product they want urgently?

Finally on October 21, when the inverter had yet to be delivered, he was offered a refund, within two weeks. But only got his money back this week, after I took up the case.

The website’s Ts and Cs also state items may be returned within two weeks of delivery, but that a 15% “handling fee” will be deducted from the refund. This is illegal — the Electronic Communications and Transactions Act gives consumers a seven-day cooling-off period — from the day of delivery — in which to return the product, for no particular reason, for a full refund. The only cost the consumer is required to pay is that of returning the item to the supplier.

When buying online:

• Don’t pay by EFT if you have a credit card;
• Read the Ts and Cs, especially around returns policies, and check out the reviews on HelloPeter; and
• Look out for words such as backorder.

Beware — your contract cancellation is not immediate

Many of the complaints I get about contract cancellations arise from a simple misunderstanding by the consumer about timing. Many assume the cancellation is immediate, when it’s not.

Even if a fixed-term contract with companies such as a gym, cellphone service provider or vehicle tracking company has come to the end of its term, the contract does not automatically “expire”.

It continues on a month-to-month basis until you give a month’s notice of cancellation. That means that after you’ve cancelled, there will be one last debit order coming off your bank account, to cover that extra month’s notice period.

Lerato forgot to cancel her vehicle tracking contract when she sold her car last October.

Eight months later when she realised this, she contacted the company and was told to send a cancellation e-mail, which she did. “The following month I was debited again so I stopped the debit.

“A few months later I was contacted by the company’s lawyers because they had handed me over.

“I’ve also been listed with the credit bureau. I need help as this is not a record I want in my name.”

I advised her to find out what her debt currently stands at, pay it, insist on a settlement letter and then submit that to the credit bureau, which is obliged to then remove the adverse listing.

It would have been really helpful if the company had advised her that a month’s notice period applied, and warned her that they’d be debiting her bank account the next month.

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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