MAKING SENSE OF GIRO - PART 2

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 second of a two-part series on the use of GIRO accounts and how you can terminate your GIRO facility. 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 an existing GIRO arrangement, the following FAQs may be useful to help you understand how to manage your GIRO arrangements.

(I) USE OF GIRO ACCOUNTS

Does the bank have to seek my authorisation in all GIRO transactions?
No, GIRO deductions are made automatically at every billing due date based on the authorisation given by you according to the DDA form and the billing information provided by the BO. Your BO will advise you of the actual date of the first GIRO deduction. If you disagree with deduction schedule and amount, you should immediately inform your bank and BO.

Can I change my GIRO payments (a) between accounts within the same bank or (b) to an account with another bank?
(a) Changing your GIRO payments between accounts within the same bank
You should check with your bank. Some banks allow changes of bank accounts within the same bank for GIRO payments without the need to re-apply. You will need to inform your bank, which will make arrangements with the BO to receive payments from the new bank account.

It usually takes approximately 21 working days for this change to come into effect. In the meantime, you should ensure that you maintain sufficient funds in the existing bank account for the scheduled GIRO deductions.

(b) Changing your GIRO payments to an account with another bank
You will need to inform your BO of the change and submit a new GIRO DDA form to apply for GIRO deduction from another bank account. It will take approximately 21 working days for the new application to be processed and activated. Your BO will advise you of the actual date when the first GIRO deduction is made. In the meantime, you should ensure that you maintain sufficient funds in the existing bank account for the scheduled GIRO deductions. If the existing bank account is closed, you should make other arrangement to pay your bills until the new GIRO arrangement is in place. If you are unsure, you should check with your BO.

Some BOs will automatically terminate the previous GIRO arrangement upon the commencement of the new GIRO arrangement. If your BO does not provide this service, you will need to terminate your previous GIRO arrangement between your BO and your bank.

(II) TERMINATION OF YOUR GIRO ARRANGEMENT

If I do not use my GIRO arrangement, will my bank/BO terminate it automatically?
No, your bank/BO will not terminate your inactive or dormant GIRO arrangement automatically. You should review your existing GIRO arrangements regularly, and terminate them if they are no longer required.

Can I temporarily suspend my GIRO payment for a particular bill?
Most banks do not allow temporary suspension of GIRO payments. However, you may wish to check with your bank whether they provide such a service. If it does, ask your bank if a charge would be levied for this service.

For most banks, when a "stop payment" request is received, it is equivalent to a request to terminate all future payments by GIRO to a particular BO. Subsequently, if the customer wishes to resume payment by GIRO to the same BO, a new application is required.

What should I do if I want to stop paying a bill by GIRO permanently?
You should write in to notify your bank, with a copy sent simultaneously to your BO to inform them of the termination of a GIRO authorisation. Some BOs may also accept telephone-call instructions to terminate the GIRO arrangement.

How will I know that my GIRO arrangements have in fact been terminated?
Some BOs will send you a confirmation that your termination request has been effected. You may also wish to contact your BO's customer service center to confirm the status of your GIRO termination.

Tips for You As A GIRO User

• Check your bank statement/savings passbook to ensure that the deductions have been made correctly. If you find any incorrect deductions, you should contact your bank and BO immediately.
• If you decide to change your GIRO payments to be deducted from another bank account, you should inform the bank and BO and ensure that the existing GIRO arrangement is not terminated until the new arrangement is in place. At the same time do not assume that your previous GIRO arrangement will be automatically terminated.
• Review all your GIRO arrangements regularly and terminate those that are no longer required.
  

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.