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The rumour making the rounds is that you (and the rest of us) will now be charged for failed debit  transactions.

Um, no. That’s not right.

Let's break down the facts.

1. Yes, there is a charge, but this charge is for failed direct debits, not all debit transactions.

You won't be charged if a bill payment, airtime (or data) purchase, outward transfer, ATM withdrawal or card payment fails.

You get the picture.

2. A direct debit needs your permission. For a direct debit to be made on your account, you have to give your bank a written and signed instruction to pay on your behalf at a specific time.

If, for example, you pay a certain bill every quarter, you can instruct your bank to pay the billing company every time the bill is due.

This isn't common because banks settle most bills on a pay-as-you-go basis, but it's an actual thing.

How to get a refund should your bank debit your account for a failed transaction

3. A direct debit fails when an account doesn't have enough money in it. If this ever happens to you (hopefully never), you will be charged 1% of the amount you were supposed to pay or 5,000 naira – whichever figure is higher.

That's a Central Bank rule, as you must already know.

4. Therefore, if you have an active auto-renewal payment in your account, it is necessary you cancel it so you don't get charged if it fails due to insufficient funds.

5. You can breathe easy. Really, you can. No one is going to charge you for “insufficient funds,” at least not today.

© Kuda Times