The BACS system is completely unacceptable!!

agsnu

Surely single one off payments are BACS Direct Credits?

YorkshireBoy

agsnu wrote: »

Surely single one off payments are BACS Direct Credits?

No. Here are a couple more Direct Credit FAQ pages from the APACS site...

http://www.apacs.org.uk/resources_publications/faqs/bacs_4.html
(Note the use of the word "organisations")

http://www.apacs.org.uk/resources_publications/faqs/bacs_11.html
(note the use of the word "company")

Biggles

Yes, your bank is the 'organisation' or 'company' in the case of a BACS paid via online banking.

YorkshireBoy

Biggles, one of us is wrong.

Please see this OFT report produced for the Payment Systems Task Force...

http://www.oft.gov.uk/shared_oft/reports/financial_products/oft789b.pdf

See sections 2.11, 2.12, & 3.14 and see if you still disagree?

dougz_2

I am still wondering if perhaps withdrawals were actually sent out, but then icesave lied to the banks by claiming it was error or something, and recalled it to themselves using this recall facility:

A company which is authorised to make direct credits has agreements in place with other banks regarding recalling a payment and re-crediting it to the correct account.

http://www.apacs.org.uk/resources_publications/faqs/bacs_11.html

agsnu

YorkshireBoy wrote: »

Biggles, one of us is wrong.

Please see this OFT report produced for the Payment Systems Task Force...

http://www.oft.gov.uk/shared_oft/reports/financial_products/oft789b.pdf

See sections 2.11, 2.12, & 3.14 and see if you still disagree?

Yeah - you.

Consumers find internet and telephone banking services (provided by
their bank) convenient - these services use direct credit - to effect inter-
bank payments.

oldfella

presumably if they had been using BACS Transfers they wouldnt have been able to stop the payments that had been sent on Sunday/Monday ?

YorkshireBoy

agsnu wrote: »

Yeah - you.

OK lets try again. BACS transfers initiated by banks' personal customers via telephone/internet banking are not 'conventional' direct credits, in that they do not simultaneously debit/credit (as they do with wages, salary, benefits, and other 'batch run' future dated payments).

From my earlier link...

Direct credit

3.14 Direct credit is a service enabling large and small organisations to make automated payments directly into the bank or building society account of the beneficiary. The service is mainly used for paying wages, salaries and Government benefits. In total, it is used for paying over four million wages every week and around 20 million salaries a month. The service can, however, be used for a wide variety of other applications. Consumers find internet and telephone banking services (provided by their bank) convenient - these services use direct credit - to effect interbank payments. In addition over 100,000 companies use BACS payments to pay suppliers, pensions, employee expenses, insurance settlements, dividends and refunds. Generally, the channels used by businesses to input payments into BACS give rise to simultaneous debiting of their account on the same day as the beneficiary account is credited. In contrast, banks' internet and telephone banking channels for personal customers often utilise bank standing order processes and result in the payer's account being debited in advance of the credit being received in the payee's account.

Standing orders

3.15 A standing order is 'an instruction from a customer to his/her bank or building society to make regular automated payments of a specified amount to a named beneficiary'. The term is also used to refer to individual payments arising from the instruction. The beneficiary is often another person such as a relative or landlord, or can be an organisation, for example, a charity. As such, standing order services are provided by banks according to their own terms and conditions (that is, not governed by common rules). However, inter-bank standing order payments are executed between banks and building societies as a type of direct credit.

So, standing order processes (which is what BACS transfers are for us consumers) are not governed by direct credit rules (one outcome of which is their failure to simultaneously debit/credit), because they are a 'type' of direct credit.

Biggles

The fact that funds are apparently not debited & credited simultaneously is a red herring, as we all know the bank keep it as a 'float' (interestingly, that's even the word 'the industry' uses for it in 2.13!) before making the transaction.

2.13 also confirms what I have previously observed, ie that LTSB (and, apparently, HSBC) reduce the float by not debiting the client's account till Day 2 of the cycle.

But if the main difference between DCs and SOs is that the customer's account is debited on Day 1 (according to http://www.apacs.org.uk/resources_publications/faqs/standing_1.html), then LTSB cannot be using SOs to make online bill payments, as the funds always remain in my account on that day.

All of which is miles from a thread about KE & IceSave, I admit!

dunstonh

We have to remember that electronic payments were just bolted onto the old paper based system and no legislation was put in place prior to faster payments to cater for them. So whilst they were electronic, they were using a paper based back end and clearing method and cycle.

Faster payments has largely been a bit of a let down so far.