abusive account handling

masonic

robpw2 wrote: »

actually most companies if they take by dd dont send a bill till after its taken

If a company does not notify you of your direct debit payments in advance, then you can reclaim the payment and any consequential bank charges from them using the Direct Debit Guarantee, can't you?

MPH80

robpw2 wrote: »

actually most companies if they take by dd dont send a bill till after its taken

I've never experienced that - all the companies who take money by dd on my account always send me a bill first ... credit cards ... water ... insurance ... etc.

It might have been a bill sent 6-12 months ago detailing all payments for the coming year - but they do it.

olly300

masonic wrote: »

If a company does not notify you of your direct debit payments in advance, then you can reclaim the payment and any consequential bank charges from them using the Direct Debit Guarantee, can't you?

It depends on the DD agreement you signed or verbally agreed with the company.

The wording on different companies agreements vary slightly so it's important to ask for the actual paperwork or for it to be read to you before you agree to it.

ShelfStacker_3

robpw2 wrote: »

actually most companies if they take by dd dont send a bill till after its taken

Funny, because I've had DDs with Greenbee Telecoms, O2, Vodafone, Sky (x2), Three Valleys Water, Virgin Media, Greenbee Pet Insurance, HSBC Home Insurance and my local council - all of them either send me a monthly bill about a week or two before the DD is due (detailing when it's due and how much it is) or have prenotified me of when my DDs will come out when I first entered a contract with them (thinking council tax and water here).

In fact, I've never used a company who didn't advise me in advance of when they'd take payments and for how much, and far enough in advance that I could get an overdraft limit increased or put on, or borrow money to cover it. The companies are required to do this, so that they can't just take money from you whenever they like. If you forget or ignore the notifications, more fool you.

moneysavingallday

Surely if you run your account properly having a bill that is slightly larger than expected is not going to send you over your OD limit. It is precisely these things that an OD limit is for. So, say you have an OD limit of £1000. If your electric company suddenly takes £200 one month instead of the £100 you expected, it won't be a problem because you have an overdraft limit. I think part of the problem may be that people live their life constantly up to their overdraft limit so that when they have a genuine emergency it sends them over the OD limit

ShelfStacker_3

moneysavingallday wrote: »

I think part of the problem may be that people live their life constantly up to their overdraft limit so that when they have a genuine emergency it sends them over the OD limit

Many people do. A common problem for banks is people either treating ODs as free money for them to spend or as a loan they don't need to pay back, when really they're for events as you describe - very short term borrowing of less than a month or so.

None of the banks appear to be proactive about this though - preferably, the banks should be actively discussing with the customer their management of the account and deciding on a way forward. Some of them, Alliance and Leicester being the chief one I can think of, seem to be actively courting this crowd by offering a 0% overdraft and matching facility, so people can stay right up to their limits for free and for longer without ever repaying a penny (which I personally consider despicable).

moneysavingallday

A lot of people I know are in OD all the time and have been since student days (15 years ago). They might be in credit for a day or two each month immediately after their salary goes in but by the end of the month they are up to their OD limit again. These are all people on good salaries too and mainly single with no kids (so reasonably high disposable income).

I guess this is why people often go berserk when the bank removes or reduces their overdraft. They have not been using it as an emergency buffer, they've been using it to take care of day-to-day living expenses and seeing the OD as if it is their God-given right.

PROLIANT

ShelfStacker wrote: »

Sadly, your view is wrong. If that was truly what banks wanted, then they would not close accounts for abuse of overdraft facilities, would not enforce repayment on people always up to their limits and would be begging for badly off customers, which is simply not the case - banks prefer safe, "predictable" customers who maintain a consistent cashflow. Simple as.

To reply to the OP's point, it's not so much "surprising" or an achievement, but there are a lot of people who feel it's their god given right to ignore any limits they've agreed to and suffer no consequences as a result. Witness the furore over bank charges - yes, extortionate and disproportionate, but the banks cannot do nothing and there has to be some dissuasion from just withdrawing more than you're allowed.

I second that!

PROLIANT

I have a £100 overdraft faciltiy on my current account, it is up for review in Feb 2009, but I never really use it so I might just keep it at £100 or maybe move up to £200.

masonic

ShelfStacker wrote: »

Some of them, Alliance and Leicester being the chief one I can think of, seem to be actively courting this crowd by offering a 0% overdraft and matching facility, so people can stay right up to their limits for free and for longer without ever repaying a penny (which I personally consider despicable).

Funnily enough, I have a largish 0% overdraft from A&L, which I stay right up to my limit on. However, I also have the savings to hand to clear it at a days notice if I ever needed to. Meanwhile, I am earning interest on the money from my overdraft.

Edit: In fact, I can think of at least one reason not to keep my account in credit - my debit card purchases are covered by Section 75 protection. Isn't it also advantageous to be overdrawn in cases of debit card fraud? So there are some quite valid reasons for keeping an account overdrawn.