CNA Explains: What causes GIRO errors and what you can do if it happens

The Association of Banks in Singapore issues guidelines on operating a GIRO.

The process begins when a customer applies to set up the GIRO, giving a billing organisation permission to debit their bank account, said Associate Professor Tan Chong Hui of the Singapore University of Social Sciences’ finance programme.

The customer’s bank will then verify and activate the arrangement.

While the arrangement is active, the billing organisation can submit debit requests through the GIRO clearing system, and the bank will deduct funds accordingly without needing approval from the customer.

The consumer only needs to ensure sufficient funds are available when the bill is due.

How common are GIRO errors? How do they happen?

GIRO deduction errors are uncommon, said Mrs Ong-Ang Ai Boon, director of the Association of Banks in Singapore.

Professor Sumit Agarwal of the National University of Singapore’s business school also said GIRO errors are rare.

“There are very small issues that happen, very few and far between, but systematic problems are very rare,” he said.

When asked whether errors are more likely caused by humans or systems, he said both are possible – although pinning down the cause requires knowing the specifics.

“This could be some innocuous error, but it could also be malpractice. We just don’t know,” he said.

Assoc Prof Tan said incorrect or duplicate charges typically originate from the billing organisation. The bank usually acts on the instructions given by the billing organisation.

If the billing organisation’s system generates two debit requests for the same bill, or an incorrect amount was included in the instructions to the bank, the bank would simply make the deduction as requested, he said.