Not checking your bank statement regularly could be costing you thousands
19/01/2018 A lot of us are guilty of only checking our bank statements when we have to submit them somewhere or when we get a bank notification that does not seem right, unaware of the potential horror that could be hidden in the months of statements that go unchecked. Relying solely on bank notifications for transaction reports and balances and neglecting to check your bank statement means unauthorised and incorrect debit orders and transactions could be processed against your account without you suspecting a thing.
Over the past few years, thousands of consumers have fallen victim to debit order scams and marketing gimmicks from companies that process fraudulent debit orders against their accounts. While that is an already stressful situation, the position of banks on the matter is a further blow to consumers - many of whom are aggrieved with their banks and struggle to understand the complexity of why their bank can’t simply stop the debit orders.
The most common scams deduct small amounts that are just under R100, like R69, R79 or R99, and sometimes the transaction is duplicated twice or more. Although uncommon and often easier to spot, these debits can go as high as R299. Depending on how often they’re processed and how long they go undetected, these can end up costing you thousands. Most banks don’t notify you of transactions below R100. If you don’t check your statement or know exactly how much is in your account at any given time, then you are pretty much flying blind when it comes to these ‘insignificant’ amounts. What makes matters worse is that you may have many debit orders going off at once and pay little attention to every single notification.
If you have been scammed once before, it is very likely that it wasn’t the first or the last time, so you should be vigilant when it comes to what gets debited from your account.
It is important to note that legitimate companies can also deduct money from your account incorrectly. Sometimes the company continues to debit your account even after you cancelled whatever contract you had with them, or they debit much more than you agreed to.
What you can do
Most consumers would prefer an answer to the question “what can my bank do”, but unfortunately, as it stands, the solution isn’t with banks. Banks are third parties to debit order agreements, so they can’t simply stop or reverse them.
Checking your bank statement every month has become a simple thing to do with most banks giving you access to an electronic statement via the bank’s app and internet banking, use it! When you check your statement, flag incorrect, duplicate and suspicious debit orders. You can then dispute the payments within 40 days using the app, internet banking or by visiting a branch, and reverse the payment almost immediately. Thereafter, you can ask your bank to process a stop payment order, but this is usually only temporary and may not work if the debit order reference is changed, which is why a thorough monthly check is crucial. Debit orders disputed after more than 40 days can also be reversed, but your bank will first have to check the validity of the transaction with the collector’s bank.
If you check your statement a month or two after picking up a fraudulent debit, and it seems to have stopped, you should continue checking because sometimes it is just an attempt to trick you into thinking you’re off the hook.
You should also, after reversing the payment, contact the company in writing and ask them to stop deducting the money and remove you from their system. If it is a company that you previously had a contract with, provide them with details of your agreement and how long the debit orders went off after you cancelled the contract so they can refund you. If the fraudulent debit orders continue from a company even after you informed them in writing to stop the payments or if you can’t get hold of them, you should open a case of fraud with the police.
Light at the end of the tunnel?
Maybe, but not so fast.
Some consumers are so fed up with reversing fraudulent debit orders and the associated high fees for direct debit reversals and stop payment orders that they are willing to bear the brunt of fraud in hopes that it will stop. Debit order reversal fees differ from bank to bank, and despite the plight of consumers, it seems those fees are there to stay.
Banks acknowledge the issue and are, by all appearances, working at making life easier for their clients. One bank has introduced a tool that informs customers of any debit order that takes place on their account allowing for a quick remedy, including the service provider name and amount. Most banks also give customers the ability to check their current debit orders. A new industry-wide initiative, Debicheck, also seeks to address this issue by letting you approve new debit orders given the service provider uses Debicheck.
Whether or not a way to proactively stop fraudulent debit orders will be found is uncertain but baby steps in the right direction make all the difference in this seemingly hopeless situation consumers find themselves in.