Banking procedures can be confusing, especially when money is deducted from one’s account. Once a payment has been made from one’s bank account, can anything be done about it?
If money has been deducted/debited from your bank account, it’s important to know what mechanism was used to perform the debit. The two options are:
(a) Stop Order: This means that you, as the bank’s client and the holder of the account, have asked/instructed the bank to make payment of a specific amount to a specific person/company every month. This will continue until you (the client) instruct the bank to stop this payment. Because this is an instruction directly from you to your bank, you cannot dispute these transactions after the payment has been made i.e. you cannot ask your bank to reverse the payment.
(b) Debit Order: This means that a company (e.g. a creditor or service provider such as an insurance company or cell-phone operator) has your authorisation/consent to instruct your bank to debit your account and make payments to them. Debit orders can be either:
(i) Authenticated Early Debit Orders (AEDO), which means that the company giving the instruction to your bank has confirmation that they have your authorisation to do so e.g. they loaded the transaction via a terminal into which you inserted your bank card and entered your PIN. You therefore cannot later claim that you didn’t know that this debit order had been loaded, and you therefore cannot dispute these transactions and ask your bank to reverse them.
(ii) Non-Authenticated Early Debit Orders (NAEDO), which means that the company has only told your bank that they have your authority/consent to load the debit order, but hasn’t necessarily provided confirmation. It is strongly recommended that everyone check their bank statements every month, just to make sure that there aren’t any suspicious or unauthorised NAEDO transactions being debited. If there are, you CAN dispute these. According to the Banking Ombud (Bulletin 12, 01/10/2013): “A customer can instruct his or her bank to reverse a disputed debit order. If the disputed debit order is reported within 40 days of it appearing on the account, the bank will reverse it immediately”.
Both AEDO and NAEDO transactions can also be “tracked”, which means that if they cannot be processed on initial presentation (e.g. due to insufficient funds in the account), they can be automatically re-presented if a deposit is made into the account within a certain number of days (and funds therefore become available).
If you know that a debit order is going to be processed from your account, you can also instruct your bank NOT to allow this payment to be processed. You will need to provide the bank with the following information: the beneficiary (i.e. who gave the instruction for the debit), the date of the debit order, the amount to be debited and the reference number. Be aware that ANY alteration in the debit order (e.g. if it’s processed on a different date, or the amount changes even by 1c), your instruction to stop the payment may not be recognised and the debit order may still be processed.
There may be bank charges incurred for asking your bank to load a Stop Order, or for giving the instruction to stop payment of a debit order.
It’s also advisable to have written confirmation of any instructions that you give the bank. You can either write down your request/instruction and ask the teller to stamp it and give you a copy or, once you’ve given the instruction, ask the teller for printed confirmation of the instruction. Should there then be a dispute at a later stage, it’s always better to have something in writing to which you can refer, rather than it resulting in an argument about who said what.
Clients often feel intimidated about dealing with banks and giving them instructions but, as we often remind our clients, remember that YOU are THEIR client – YOU have given the bank the opportunity to provide you with a service. You have every right to give them instructions. After all, it is YOUR money that they’re managing.
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