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Direct Debit payments!!! Bank taking them early!!!!
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# 1
autumnsymphony
Old 22-04-2008, 10:41 PM
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Default Direct Debit payments!!! Bank taking them early!!!!

Hi everyone
Apologies if this has already been reported but I am soooooo mad about my bank.....Lloyds TSB.

I have standing orders and direct debits set up from my current account to pay the usual utilities etc. The direct debits are due to leave my account on the 21st of each month.
I logged onto my account on Sunday 20th (April) and to my horror I only had £29.99 in my account - when there should have been around £600 in there! I checked my statement and couldn't believe that there were payments going to my mortgage, gas company etc etc stating that they had left my account on the 21st April. I checked the date on my PC and then a calendar and my diary to see if I had dates wrong - but no it was Sunday 20th! I then checked my direct debit details and they all said...."last payment taken on 21/04/08"!!!!!:confused:
Impossible as it was only the 20th!

I sent an email to my bank asking what they were doing letting them out before the date - as we all know that the direct debit mandate states that payments will be taken on or after the date. I questioned what would have happened if I hadn't already had the money in my current account as I could have quite easily been keeping them money in my savings account and doing a transfer on the day before the payments were due!

The reply i received today from Lloyds TSB was shocking and I thought you should all be aware of this. I have copied the whole reply to see what you all think.
Dear Mrs O'Donnell,

Thanks for your e-mail about future dates showing on your statement.

Automated payments, such as standing orders, Direct Debits and Internet Banking Bill Payments are processed in batches, five times a week. Our payment processing occurs from Sunday to Thursday and deals with the following working day's transactions. Due to this, payments due to debit an account on a Monday are processed on a Sunday afternoon at around 12 noon.

At this time on a Sunday, the system operates as if it was Monday. Therefore, automated payments can leave your account after around 12 noon, but they'll show Monday as the transaction date.

In the case of debit card transactions, the beneficiary can claim payments on non-working days. These payments will be processed on the next available working day, however, until this time the money is earmarked and taken away from your 'Available balance'.

When you make a transfer between your own accounts over the weekend, the money will be instantly available for you in the account, however your statement will date the transaction as the next working day.

The reason that this shows on your statement, is because Internet banking allows you to view your statements in real-time, which means you can see transactions as they're applied to your account.

This is a system that has been in place for some time. However, as it’s now possible to view your account online in real-time you can now view the transactions as they are applied to your account.

If there's anything else we can help you with, please let us know. Alternatively, to obtain an instant answer, why not try using our Online Help Centre at
http://lloydstsb.creativevirtual.com/LloydsTSB/? It answers over 90% of our customers’ questions.

Many Thanks

I have just emailed them again saying that I feel that this is wrong - what do you all think? my email reply to them below.
Thanks for the explanation - but this still could have overdrawn me.....resulting in me having to pay a lot of bank charges and getting payments refused no doubt!
All direct debit mandates state that the payment will be taken ON the date or AFTER if the date falls on a nonworking day! So why do you have the right to do things differently?

What would have happened if I would have had the money in my savings account and then logged on to transfer it on Sunday 20th ready for the bills going out on the 21st? I would have been in deep trouble with your charges and the recipiants!!!

I do not feel that you have the right to do this whether you 'batch' your payments or not!

I will be looking into this further as I am sure there are millions of people out there that do not realise this is happening.

Look forward to hearing what you think....... maybe this is how they are going to make their money back for all the charges we've claimed back from them!!!!

AutumnSymphony


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# 2
Snooze
Old 22-04-2008, 10:47 PM
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Just been talking about this exact same issue on the credit card forum.

Have a look at this thread from reply 19 onwards - http://forums.moneysavingexpert.com/....html?t=874715

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# 3
PBA
Old 22-04-2008, 10:48 PM
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This type of thread seems to come up fairly often. The weekend isn't a banking day, so if you don't have enough money in your account to pay a DD at noon on Sunday you wouldn't be able to get that money in by Monday 9am. Therefore it's irrelevant when the bank choose to run their batch. Sounds like they've correctly dated the outgoing payment for the Monday, so you wouldn't lose interest on the fact it was processed the day before.
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# 4
YorkshireBoy
Old 23-04-2008, 12:01 AM
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Quote:
Originally Posted by PBA View Post
Sounds like they've correctly dated the outgoing payment for the Monday, so you wouldn't lose interest on the fact it was processed the day before.
Exactly. You're earning interest on the 'balance', but can only spend the 'available balance'.
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# 5
YorkshireBoy
Old 23-04-2008, 12:05 AM
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Quote:
Originally Posted by autumnsymphony View Post
...as we all know that the direct debit mandate states that payments will be taken on or after the date.
As we all know?!

Direct debits will be taken when the statement/DDI says they will...and some* say they'll be taken the working day PRIOR to the date if the date falls on a weekend/Bank Holiday.


* eg John Lewis Partnership credit card (see the thread linked to by Snooze above)
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# 6
LilacPixie
Old 23-04-2008, 12:24 AM
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RBS clear all mondays transactions at around 3am on the saturday morning both debits and credits.

I just cannot see the issue as the OP has stated as the weekend is not a banking day and the transactions are dated for the monday anyway what difference it makes.
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# 7
annettetabs
Old 23-04-2008, 11:27 AM
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Quote:
Originally Posted by LilacPixie View Post
RBS clear all mondays transactions at around 3am on the saturday morning both debits and credits.

I just cannot see the issue as the OP has stated as the weekend is not a banking day and the transactions are dated for the monday anyway what difference it makes.
I bank with Natwest and they clear Mondays transactions on a Sunday. If the money is going to be coming out of my account on the Monday anyway, it doesn't make any difference to me.
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# 8
Mikeyorks
Old 23-04-2008, 11:45 AM
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Quote:
Originally Posted by autumnsymphony View Post
I have just emailed them again saying that I feel that this is wrong - what do you all think?
Your Bank are quite correct ..... and offered you a fairly accurate explanation. You're incorrect ..... and would be naive to send your reply to them.
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# 9
dollydoodah
Old 23-04-2008, 12:29 PM
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Quote:
Originally Posted by PBA View Post
This type of thread seems to come up fairly often. The weekend isn't a banking day, so if you don't have enough money in your account to pay a DD at noon on Sunday you wouldn't be able to get that money in by Monday 9am. Therefore it's irrelevant when the bank choose to run their batch. Sounds like they've correctly dated the outgoing payment for the Monday, so you wouldn't lose interest on the fact it was processed the day before.
Yes you can. I can quite easily transfer the money from my Lloyds Saving account into my Lloyds Current account and it goes in instantly.

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# 10
Rafter
Old 23-04-2008, 1:03 PM
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Sounds very sensible policy by Lloyds in my view.

They are processing on a Sunday to avoid slowing down all their systems on a working day.

The 'available balance' is also telling you what is available to spend given that a whole host of payments are going out first thing the next day, even though you will continue to earn interest on the whole £600.

I'd far rather this way than think I have £600, make a big debit card payment and then get landed with an overdraft charge the next day.

Remember that some banks (not Lloyds I think) deduct payments before deposits on a certain day. So even if you made a transfer to arrive on 21st in the afternoon your DDs could bounce in the morning or you could be landed with charges.

R.
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# 11
gt94sss2
Old 23-04-2008, 1:15 PM
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Quote:
Originally Posted by autumnsymphony View Post
What would have happened if I would have had the money in my savings account and then logged on to transfer it on Sunday 20th ready for the bills going out on the 21st? I would have been in deep trouble with your charges and the recipiants!!!
The T&C of most banks state that you need to have sufficient money in your current account the working day before in order to meet any direct debits and standing orders.

Having said that, even if you go 'temporarily overdrawn' on the Monday, Lloyds will let you top up your account (until 3:30pm) and not charge you for being overdrawn, while HSBC let you do the same but are slightly more generous and give you until 8pm or midnight.

Regards
Sunil
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# 12
amandathepanda
Old 23-04-2008, 11:51 PM
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This system also works in your favour, if money is due in to your account via bacs on a Monday you can withdraw it anytime over the weekend.
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# 13
dunstonh
Old 24-04-2008, 12:11 AM
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Quote:
Apologies if this has already been reported but I am soooooo mad about my bank.....Lloyds TSB.
Now that you realise that Lloyds are doing nothing wrong and you were mistaken, are you happy with that?

For decades Lloyds have been able to show Monday's transactions on a Saturday. 20 years ago you could go into a Saturday branch (not many back then) and get a "printout 10" to see what was going through monday. It had no impact on overdrafts because as others have said, Saturday is not a working day. The internet has allowed online banking but all you are getting is better interface to what has been the case for a long time.

Nothing wrong here at all.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 14
Toomuchdebt
Old 24-04-2008, 12:23 PM
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Quote:
Originally Posted by amandathepanda View Post
This system also works in your favour, if money is due in to your account via bacs on a Monday you can withdraw it anytime over the weekend.
No it doesn't-I get money paid in every Monday morning without fail (child tax credits)and I can't access it until around 3am on Monday morning-it's just not there before that time.As for the direct debits issue-my direct debits don't get taken out on a Sunday and I have often had a DD come out Monday morning after the cash has gone in-they've never gone out on Saturday or Sunday and I check my account online every day.I'm with Nationwide.
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# 15
dunstonh
Old 24-04-2008, 2:19 PM
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Quote:
I'm with Nationwide.
Building societies and some of the ex building societies often run legacy computer systems which are not as up-to-date as some of the banks. Indeed, it wasnt until not too many years ago that they stopped using the local bank branches to pay the money into themselves. The building society manager used to cross the road and pay all the cheques and cash in that they had taken that day into the bank the society held its account at.
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# 16
Mark7799
Old 24-04-2008, 2:21 PM
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Quote:
Originally Posted by dunstonh View Post
Building societies and some of the ex building societies often run legacy computer systems which are not as up-to-date as some of the banks. Indeed, it wasnt until not too many years ago that they stopped using the local bank branches to pay the money into themselves. The building society manager used to cross the road and pay all the cheques and cash in that they had taken that day into the bank the society held its account at.
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# 17
woozywendy
Old 24-04-2008, 4:14 PM
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Quote:
Originally Posted by Toomuchdebt View Post
No it doesn't-I get money paid in every Monday morning without fail (child tax credits)and I can't access it until around 3am on Monday morning-it's just not there before that time.As for the direct debits issue-my direct debits don't get taken out on a Sunday and I have often had a DD come out Monday morning after the cash has gone in-they've never gone out on Saturday or Sunday and I check my account online every day.I'm with Nationwide.

Same with my bank. I am with Halifax and also check my account regularly. Also get our tc on a monday.
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# 18
amandathepanda
Old 25-04-2008, 8:28 AM
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Proper Banks let you take out your money that goes in on a Monday over the weekend, but some of the building society banks don,t.
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# 19
Mikeyorks
Old 25-04-2008, 3:08 PM
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That's not the criteria. If a BACS Direct Credit for salary is due on a Monday - then it should be processed in the Sunday night batch - and be available in the early hours of Monday morning.

But most of the 'proper Banks' are incapable of running their systems over the weekend. So they have to process it in the Friday night batch (along with DDs due Monday - which should also be processed overnight Sunday). So you 'see' the availability (of the salary) over the weekend and the unavailability of the DDs similarly.

Halifax are the only ones I know that run systems 7 days. And they put the correct components into the Friday and Sunday night Batch, in order you see a correct picture. They don't run Batch on a Sat night as there's no point - as no one else is feeding them anything to process!

All to do with how capable their systems are - nothing to do with Banks or Building Societies (ex or otherwise). Be interesting to see how they all cope with the 'instant' parts of 'faster payments' .... which is supposed to work between Institutions on every day ... not just 'working days'
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# 20
helenbright
Old 12-05-2008, 10:12 PM
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Default Banks taking direct debits early

Horrified I was when I found that I had been charged yet again for apparently being overdrawn when it didn't show up on my online banking or on my statement. Halifax told me that I should read my terms and conditions and that it had occurred because they take direct debit payments at 3am on the date the DDs are supposed to go out. Naturally I do not think like a bank and I assume that the date the money is taken is a normal working day i.e. 9am to 5pm. But NO! we have to think like machines and then be spoken to like numbskulls. Does anyone have any tips about how I get my bank charges back? Helen:rolleyes:
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