MAKING SENSE OF GIRO - PART 1 

 

Many people use GIRO to pay their bills. However, most do not understand how GIRO works. As part of the MoneySENSE national financial education programme, we feature here the first of a two-part series on how you can apply for GIRO and what you should take note of with regards to GIRO deductions. This article is adapted from the "Making Sense of GIRO" FAQ jointly produced by The Association of Banks in Singapore, the Consumers Association of Singapore and the Monetary Authority of Singapore.

 

GIRO is a service provided by your bank. It is an arrangement you can make with your Billing Organisation (BO) to debit your designated bank account to pay your bills on a regular basis. For example, you may pay your utility bills via GIRO. In this case, the BO will be the Singapore Power Services. In GIRO direct debit (DD), which is used mainly for the purpose of bill payments, there is a three-way relationship between you, your bank and the BO. To start a GIRO arrangement, you have to send a signed GIRO Direct Debit Authorisation (DDA) form which is a written authorisation to your bank to allow the BO to initiate a collection instruction on a regular basis to deduct the required amount from your designated banking account.

 

If you have not signed up for GIRO before or wish to understand how GIRO works, the FAQs below may be useful to you.

 

(I) HOW TO APPLY FOR GIRO

 

How do I sign up for GIRO?

You can usually download an application form from the BO's website, call the BO's hotline number, write in, email the BO to request for the form. Some BOs will send you the form during their GIRO promotion exercises or include it in your monthly bill. You should complete the form and return it to the BO. In this form, you must provide the following information:

  • The name of your bank and all relevant account details such as the name of the account holder, account number and contact numbers.
  • Your signature according to the bank's signature record; and
  • Your particulars as the user of the services provided by the BO(s).

The GIRO arrangement will be in place once your application is approved by both the bank and BO.  The GIRO authorisation will only be terminated when you specifically give BOs instructions to do so.  The arrangement requires no further action from you once it is in place, except that you should ensure sufficient funds in your bank account at the time of deductions.

 

How long does my GIRO application take to be approved?

The GIRO arrangement should be effected within 21 working days from the date of your application, provided your details and authorised signature in the GIRO DDA form are correct. You should continue to pay your bills in your usual way until your BO notifies you that your GIRO application has been activated. If you are unsure, you should check with your BO.

 

What fees and charges do I have to pay in order to set up a GIRO arrangement?

Currently, there are no fees and charges for setting up a GIRO arrangement. You should check with your bank and BO to obtain more information on their fees and charges.

 

If you already have an existing GIRO arrangement, read on to know more about the deduction process.

 

(II) WHAT TO TAKE NOTE IN A GIRO DEDUCTION

 

How do I know that my bill has been paid?

The amount paid will be printed in your savings passbook or bank account statement, together with a code to tell you which bill it is for. More details are shown in your bank account statement, such as the BO's acronym as well as your account number with your BO. BOs may send you a notification showing you what and how much have been deducted.

 

How do I keep track of my GIRO payments?

Check the bill from your BO immediately and verify the deduction(s) against your bank statement or savings passbook. If you disagree with the deducted amount or the amount to be deducted, you can take the following steps:

 

(a) Before deduction has been made

  • Contact your BO immediately. If the GIRO deduction process has not started, the BO should suspend the deduction for investigations.
  • If your complaint is valid, the amount will be adjusted. Otherwise, the deduction will go through.

(b) After deduction has taken place

  • If your BO had deducted the wrong amount, the BO will refund the difference.
  • If the bank had deducted the wrong amount, they will correct the wrongful deduction.

If the BO or bank has not given you a satisfactory response, you can approach the Consumers Association of Singapore (CASE) at 6463 1811 or the Consumer Mediation Unit (CMU) at 6226 2656 respectively for assistance.

 

Can someone else pay my bills on my behalf through GIRO?

You should be able to pay your bills by GIRO using another person's bank account. Check with your BO whether it provides this facility. In the GIRO application form, you must provide:

  • The name of the payer's bank and all relevant account details such as the name of the account holder, account number and contact numbers;
  • The payer must sign according to his authorised signature in the bank's signature record; and
  • Your particulars as the user of the services provided by the BO(s).

Can I specify the date of expiry or set a limit for my GIRO payments?

Most BOs currently do not allow the setting of expiry date. Some banks and BOs do allow the setting of a limit for GIRO payments. You should check with your BO and/or bank whether these services are provided. If you do send a request to your bank to set the payment limit, you should also send a copy of the request to your BO to inform them of the limit. However, you may wish to note that setting a limit may result in unsuccessful GIRO deductions, if the deduction amounts exceed the limit set, resulting in an administrative fee levied by the bank and/or BOs.

 

What happens if I have insufficient funds in the account to cover the GIRO deduction?

A service fee may be charged by the bank if there are insufficient funds in your bank account to cover the GIRO deduction. Some BOs may carry out one or all of the following actions:

  • Inform you of the unsuccessful GIRO deduction, the alternative payment modes or date of second attempt at deduction, if any;
  • Recover charges imposed by the banks for the unsuccessful deduction from you;
  • Suspend or terminate the GIRO arrangement and request that you pay by cash.

Tips for You As A GIRO User

  • Read and understand the terms and conditions before you sign up for GIRO. If you are unsure, please seek clarification from your bank or BO.
  • If you have applied for GIRO, check with your BO whether the application has been approved if they do not notify you within 21 days. In the meantime, continue to pay your bills by other means. Do not assume that the application has been approved.
  • Check the bill from your BO immediately and verify the deductions against your bank statement or savings passbook. If you disagree with the deducted amount or the amount to be deducted, contact your bank or BO immediately.
  • Ensure that there are sufficient funds in your bank account to cater for the scheduled deductions. If not, you may be charged with an administrative fee by your bank and/or BO for unsuccessful deductions.
  • If you decide to set a limit for your GIRO payments, ensure that any GIRO deductions will not exceed the limit set, otherwise, the bank and BO may charge you an administrative fee.

 

 

 

These articles were provided by The Association of Banks in Singapore (ABS), the Consumers Association of Singapore (CASE) and the Monetary Authority of Singapore (MAS) as part of the MoneySENSE national financial education programme. For more information on GIRO guidelines, please refer to the ABS or CASE website at www.abs.org.sg or www.case.org.sg respectively.
Last modified on 9/10/2007