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Central bank urges debit order clients to report unauthorized deductions

Central bank urges debit order clients to report unauthorized deductions

The central bank, Bank of Namibia urged debit order clients whose money gets deducted from their bank accounts without their permission to notify their bank within 40 days or reporting such incidents to the police.Debit orders are often used as a means of payment for a range of services, such as loan repayments and subscriptions 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.

“Often debit orders related disputes arise when third party institutions withdraw amounts before the date specified in the agreed instruction; continues to collect debit orders that have been cancelled or is subject to a stop payment instruction. It further occurs when third parties debit accounts with incorrect amounts; collects a debit order without authorisation; or collects a debit order that is not consistent with the clients’ instruction,” Kazembire Zemburuka, deputy director of corporate communications at the bank said.

When clients are unable to amicably resolve a particular case with their bank, clients may then consult the Bank of Namibia, as it is mandated to mediate between consumers and their banks, Zemburuka said.

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. Additionally, future debit order payments can also be stopped for a given period whereby consumers request that their bank places 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 services is a useful mitigating measure, as this will inform clients of all deductions from their bank accounts. All-in-all, review bank statements each month by looking at each deduction, no matter how small,” Zemburuka advised.


 

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