Could I get a refund of this Direct Debit fee in this case...

nzseries1

Hi, I just want someone else's opinion before I go complaining to Alliance and Leicester about this.

On Thursday, I had £100 in my Alliance and Leicester current account. That day I went to pay something online which cost £40. Unfortunately I failed the Verified by Visa thing the first time, so I had to do the transaction again. The second time it worked.

However, they took 2 x £40 off my "available balance" (both the failed transaction and the successful one), leaving me with a £20 "available balance" and consequently my £30 direct debit on Friday failed, and I've been whacked with a £25 fee for a failed direct debit.

Only the successful £40 transaction actually came off my real balance, but my "available balance" still says £20, when it should say £60.

What I'm trying to say is that I was never "technically overdrawn", because they should never have taken the first £40 transaction off my balance because it was declined by Verified by Visa.

Do I have a case to get my £25 returned direct debit fee refunded? And, would you consider all of this my fault, or the bank's fault? Be honest, I can take criticism

Thanks in advance

Mark7799

Interesting one - ask them and see what they say. I wouldn't necessarily consider it your fault until it was known for definite why the first attempt at the transaction failed. A&L may try and blame the retailer's process but nothing ventured, nothing gained

nzseries1

Well I can tell you why the Verified by Visa transaction failed the first time, it's because they didn't accept my postcode. I've just moved house and I put my new postcode into the Verified by Visa screen, but clearly that wasn't up to date on the system yet.

I tried my old postcode the second time and it worked. So yes it was my fault the transaction was declined, however I still believe this declined transaction should not have come off my available balance.

nzseries1

Thanks Alx B and Mark7799. I'm going into the branch on Thursday and I'll post here the result.

battyboimatt

Well i use verfied by visa with A+L and it never asks for my postcode it just asks for my password for any transcations reqesting verified by visa

nzseries1

But you must have set it up the first time with your postcode? Now that I've successfully set it up I only have to enter in my password, but the first time I used it I had to enter my postcode.

MarkyMarkD

A few points here.

1. It definitely isn't the bank's error, in any way. If the funds were reserved twice by the retailer, that's the retailer's fault. If there's any reclaiming of the DD fee, that should be from the retailer, not the bank.

2. The declined authorisation thing doesn't sound like it's Verified by Visa at all. All you enter for Verified by Visa is a username and password. The non-matching postcode would have been at an earlier authorisation stage, prior to reaching Verified by Visa itself. When you say that the address wasn't up to date "on the system", what matters is whether your bank had your new address. If it didn't then the decline was your fault, not theirs; if it did, then the decline was their fault, not yours. But the decline isn't the real problem anyway - the problem is that the funds were reserved in respect of the declined transaction, and that is the merchant's fault.

nzseries1

Hi MarkyMarkD,

Thanks for your advice, however I don't believe the funds were reserved twice by the retailer - I never got past the verified by visa screen.

While I understand that usually for Verified by Visa you just enter a username and password, in this case it was my first encounter with Verified by Visa and so I had to enter my postcode, along with my date of birth, and a "personal message". It was this postcode I got wrong. Verified By Visa would not let me past because it said specifically "This postcode does not match the one on our records". When I pushed Cancel on this screen, it said "We are unable to accept this card for payment".

The bank knew that I changed my address, I have a letter dated 6 August saying "thank you for letting us know your change of address" type thing.

MarkyMarkD

You may not believe that the funds were reserved twice by the retailer, but I'm telling you that they were. Banks don't reserve funds. Banks do what the retailer ask them to do - in this case, reserving the funds for the transaction first time around, and then taking the funds from your account for the transaction the second time without reversing the reservation of funds for the abortive transaction.

Now that you've explained that you were in fact registering with Verified by Visa, rather than merely using it to authorise your payment, I understand why you had to enter your postcode, date of birth, etc. It is interesting that A&L's systems rejected your VbV registration because the details were not up-to-date, and accordingly I should ask A&L why that happened.

I still believe 100% that the reservation of funds issue was the retailer's fault.

But the only way to get that confirmed is to ask A&L why your DD was declined.

It's interesting that you know that your available balance was reduced. Does this mean you checked it, but didn't do anything about it, hence leaving your DD to bounce? If you'd contacted A&L by phone there and then, they would almost definitely have given you an overdraft limit to cover the transaction and the problem wouldn't have arisen.

Or have you surmised the "available balance" issue after the event?

nzseries1

MarkyMarkD wrote: »

You may not believe that the funds were reserved twice by the retailer, but I'm telling you that they were. Banks don't reserve funds. Banks do what the retailer ask them to do - in this case, reserving the funds for the transaction first time around, and then taking the funds from your account for the transaction the second time without reversing the reservation of funds for the abortive transaction.

This certainly makes sense to me, thanks for the info.

MarkyMarkD wrote: »

Now that you've explained that you were in fact registering with Verified by Visa, rather than merely using it to authorise your payment, I understand why you had to enter your postcode, date of birth, etc. It is interesting that A&L's systems rejected your VbV registration because the details were not up-to-date, and accordingly I should ask A&L why that happened.

Sorry for not mentioning this before. It's funny I've never been prompted to do this before, so I was probably a bit confused at the time.

MarkyMarkD wrote: »

It's interesting that you know that your available balance was reduced. Does this mean you checked it, but didn't do anything about it, hence leaving your DD to bounce? If you'd contacted A&L by phone there and then, they would almost definitely have given you an overdraft limit to cover the transaction and the problem wouldn't have arisen.

Or have you surmised the "available balance" issue after the event?

Well actually I did know, because I looked at it online specifically to make sure I had enough cash for the DD. I looked for a way to cancel that particular direct debit but there wasn't one. I didn't think of ringing the bank, I will try that in future. But I figured I wouldn't have to, because as you may know, Alliance + Leicester have the "Running Balance", the "Available Balance" and the "Balance". It was the Running Balance I really focused on, the one that actually shows cleared transactions because I figured that's what mattered. (I've never quite understood why there are three balances listed!)

It looks odd because now that all my three balances show the same figure, there was never actually a time when I went overdrawn, and just looking at the statement it seems I always had the cleared funds. I'll ask them Thursday and see what they say... thanks for your help.

MarkyMarkD

But you didn't always have the available funds, because the numpty merchant incorrectly reserved them.

The reason A&L has three balances is that they are all different!

Actual balance = actual balance
Available balance = actual balance + overdraft limit - uncleared credits - funds reserved for pending transactions
Statement balance = actual balance but excluding un-statemented transactions

So if you transfer funds between current and savings accounts, say, the actual and available balances will change instantly but the statement balance will not until the next working day.

You couldn't cancel that specific DD at the time you noticed the problem, because it was already too late.

You should never focus on the "running" (statement) balance as it's the available balance which is important for charging purposes. If your available balance is insufficient at the time the decision is made to pay or bounce your DD, it will be paid or bounced and you will be charged.