Keep an eye out for unauthorised debit orders
The Bank of Namibia is warning bank customers to take stock of unauthorised debit orders and report such deductions as soon as they are detected.
Debit orders are often used as a means of payment for a range of services, such as loan repayments and subscription fees.
“They are an instruction between a consumer and a third party or service provider, where consumers grant third parties permission to deduct money from their bank account for services rendered,” the BoN said.
Often disputes arise when third-party institutions withdraw amounts before the date specified in the agreed instruction, or continue to collect debit orders that have been cancelled or are subject to a stop-payment instruction.
It further occurs when third parties debit accounts with incorrect amounts, collect a debit order without authorisation; or collect a debit order that is not consistent with the client's instruction.
In the event where banks determine that the debit order is not authorised, banks may reverse the transaction and any related fees that are charged, the Bank of Namibia advised.
“When such activities are noticed, consumers should approach the relevant third party and report the unauthorised deduction. Consumers may further cancel a debit order by providing written or other appropriate notification to the third party whom they have authorised to make the deductions,” the Bank of Namibia said.
Future debit-order payments can also be stopped for a given period if customers request their bank to place a stop-payment instruction on their account for the exact amount of the debit order.
“Consumers may mitigate the risk of unauthorised debit orders by providing only original bank-stamped documents when applying for the product and services. Subscribing to the commercial bank's SMS notification service is a useful mitigating measure, as this will inform clients of all deductions from their bank accounts,” the Bank of Namibia said.
When discrepancies are noticed, customers are urged to report them to their bank within 40 days from when the transaction took place, and where fraud is suspected, they should report the incident at a police station, the Bank of Namibia advised.
“Consumers are further urged to always protect their banking details and only provide them when deductions have to be effected.”
STAFF REPORTER
Debit orders are often used as a means of payment for a range of services, such as loan repayments and subscription fees.
“They are an instruction between a consumer and a third party or service provider, where consumers grant third parties permission to deduct money from their bank account for services rendered,” the BoN said.
Often disputes arise when third-party institutions withdraw amounts before the date specified in the agreed instruction, or continue to collect debit orders that have been cancelled or are subject to a stop-payment instruction.
It further occurs when third parties debit accounts with incorrect amounts, collect a debit order without authorisation; or collect a debit order that is not consistent with the client's instruction.
In the event where banks determine that the debit order is not authorised, banks may reverse the transaction and any related fees that are charged, the Bank of Namibia advised.
“When such activities are noticed, consumers should approach the relevant third party and report the unauthorised deduction. Consumers may further cancel a debit order by providing written or other appropriate notification to the third party whom they have authorised to make the deductions,” the Bank of Namibia said.
Future debit-order payments can also be stopped for a given period if customers request their bank to place a stop-payment instruction on their account for the exact amount of the debit order.
“Consumers may mitigate the risk of unauthorised debit orders by providing only original bank-stamped documents when applying for the product and services. Subscribing to the commercial bank's SMS notification service is a useful mitigating measure, as this will inform clients of all deductions from their bank accounts,” the Bank of Namibia said.
When discrepancies are noticed, customers are urged to report them to their bank within 40 days from when the transaction took place, and where fraud is suspected, they should report the incident at a police station, the Bank of Namibia advised.
“Consumers are further urged to always protect their banking details and only provide them when deductions have to be effected.”
STAFF REPORTER
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