Bank charges: Customers bemoan multiple debit alerts

 

By Nneoma Ahukanna and Nightengale Ben-Onyeukwu

Pius Ogbuehi, a POS operator

 In the wake of current prevailing economic challenges confronting majority of Nigerians, the added discomfort of receiving unwanted bank debit alerts which eat into the little savings a customer has miraculously been able to keep in that financial situation is a huge concern.

Victims of such debits through what is referred to as bank fees or charges or even fraudulent double debits, expressed distress over these experiences.

One victim of double bank debit alerts recounted her tale of woe and the efforts made to rectify the problem.

Mrs Adaku Ibe (real names withheld) said she had gone to a popular mall along Orlu road and made purchases which she paid for using her bank debit card (commonly referred to as ATM card. However, there was no signal from the POS machine at the check-out point, so the Cashier borrowed her neighbour’s Point of sale (POS) machine to repeat the transaction which was successful.

‘To my dismay, I was debited twice. Instead of one debit N5, 785, I got two debit alerts of that amount. I went back to the cashier to correct the error but I was told to go to my bank to rectify it.’

I took the receipt for the first failed transaction which had been purportedly aborted by the POS machine and also the receipt for the second successful transaction’

To cut the long story short it took me three visits to the bank, hours of time spent and explanations before it was rectified.’ This whole process took three weeks.’ I’m very fortunate because a colleague of mine forfeited almost eleven thousand Naira as a result of similar experience which the bank refused to resolve. They kept telling her to wait for two weeks for the refund Everytime she returned to them at the end of the two weeks. That was last year. Up till today nothing has been done’

Nigerians are mad at their banks! They feel like the banks are always taking little bits of money from them with all these charges. There are fees for keeping your money in the bank (maintenance fees), fees for getting text messages about your money (SMS alerts), and even some hidden charges that nobody understands.

The bank managers say these fees are needed to keep the bank running and pay the government taxes. They even say the text message fees help protect your money from thieves.

But Nigerians aren’t buying it. They think the fees are too high, especially when many people are already struggling financially. They want the banks to be honest about why they charge these fees and make them more fair.

Some people are even switching to other ways to handle their money, like phone apps, because they charge less or no fees at all.

The bottom line is, Nigerians want their banks to be on their side, not take advantage of them. They want clear explanations, fair fees, and to know their money is safe.

Mr. Okere R Maduabuchi, Manager of Mbaitoli Microfinance Bank, explained, ‘There are various factors that contribute to bank charges. We have Maintenance Charges, taxes, and VAT. These all constitute bank charges. As individuals carry out transactions, the number of transactions increases the charges they incur or the debits they receive. For instance, when someone pays salaries through their bank, they are charged per transfer they make, resulting in numerous debit alerts. Maintenance fee is a fixed rate charged to every account holder, serving as a means for the bank to generate revenue to offset operational expenses. Additionally, the increase in service charges from our IT vendors and other service providers necessitates such charges, which we refer to as maintenance charges.’

He continued, addressing SMS Alert Charges, stating, ‘These charges are levied by the bank for text messages sent to customers regarding their account transactions, whether debit or credit. One advantage is that it keeps customers informed about their account activities. Without such alerts, customers might remain unaware of any unauthorized transactions, potentially leading to financial loss. Thus, SMS alerts prove beneficial to customers.’

Mr. Maduabuchi then discussed Value Added Taxes (VAT), saying, ‘VAT is a tax collected by the government. However, the specific utilization of these funds is often undisclosed in account statements. Further, we have Withholding Tax, which is also remitted to the government. Government oversight extends to all accounts held with us, and these charges contribute to government revenue.’

He concluded by highlighting the bank's commitment to transparency and regulatory compliance, stating, ‘We incur significant expenses paying various agencies, and any attempt to tamper with customer accounts would lead to public outcry. However, some charges, like those mentioned, are unavoidable. Before implementing such charges, they undergo multiple approval stages. It's not a decision made arbitrarily; rather, it's a carefully considered process.’

Dr. Nelly CC Anyanwu expressed her concerns, saying, ‘We are facing troubles here, whether it’s within the banking system or elsewhere. Just recently, at the Amakohia Flyover around six in the evening, a man was kidnapped. Even within the bank, if someone passes away, their relatives face problems accessing the deceased’s funds. The manager may lay claim to the money, leaving the relatives in a difficult situation. If you don't assert your rights, you may never receive what is rightfully yours. What exactly are the banks doing with the money they charge customers? If the Payable on Death form worked as intended, it would alleviate some of these issues. However, in reality, it's not functioning effectively. Instead, funds are being siphoned off, and legitimate claims are being neglected. People deposit money in banks with the expectation of security, but instead, it seems the bank managers and others exploit these funds without accountability. There’s a blatant disregard for tracing the rightful owners of unclaimed funds; instead, they are squandered. Ineffective banks should either be shut down or merged. Many individuals are losing faith in the banking system due to its inefficiency and lack of accountability. We often blame the broader issues in Nigeria without acknowledging that corruption within the banking sector also contributes significantly. We need a complete overhaul of the systems in Nigeria. For instance, it’s alarming how quickly bankers amass wealth without transparent means. The current hiring practices in banks lack integrity; they often prioritize connections over qualifications. Only divine intervention can rectify the dire situation facing ordinary citizens. It’s absurd how customers are arbitrarily debited without justification.’

Pius Ogbuehi, a POS operator, shared his perspective, stating, ‘Take Moniepoint, for example. As a beginner, the charges are steep, like deducting 100 naira for a 20,000 naira withdrawal. However, for transfers, regardless of the amount, they only charge 20 naira. As you progress in levels, such as reaching Mega Star level 5, the charges become more reasonable, like 90 naira for a 20,000 naira withdrawal. Plus, you start receiving bonuses on transactions. Personally, I prefer services like Moniepoint, OPay, or PalmPay over traditional banks because the latter tend to overcharge. For instance, I’ve noticed discrepancies in my UBA app balance, with funds mysteriously disappearing and vague explanations for charges. With PalmPay, OPay, or Moniepoint, the deposited amount remains consistent over time. Their transaction processes are similar to traditional banks’, yet they offer lower transfer fees, sometimes even for free. It’s puzzling whether they operate under different policies, but to me, they’re all commercial banks. Accessing loans can also be easier through these apps compared to traditional banks, which often have stringent policies and bureaucracy hindering access to credit, despite the arduous process they subject customers to.’

Prince Ifeanyichukwu Edward Moses Ikemenanwa Nwosu Nwokororie voiced his concerns, saying, ‘I strongly believe that the bank charges imposed on customers’ accounts are excessive. Whether it’s 54 naira monthly or any amount, it’s simply too much. In a country purportedly known as the Giant of Africa, it’s disheartening to witness citizens struggling to make ends meet while both state and federal governments seemingly overlook their plight. Yet, despite these challenges, banks persist in penalisng people through exorbitant charges. It’s simply unjust, my dear.’

He continued, highlighting a particularly troubling aspect of his experience, ‘One of the most egregious aspects is that regardless of whether you’re making withdrawals or not, the bank continues to levy charges against your account. It’s a testament to the cruelty within our country, perpetuated by these incessant bank charges.’