Early Direct Debit payments causing bank charges!!!
mf0u1098
Forumite 1.6K Posts
Hi All, My sister has a direct debit to pay for her car but they have been taking the direct debit amounts out early rather than the day after the bank holiday/weekend. This means that she is being charged for going over her overdraft (twice now) and (more worryingly) will be affecting her credit rating. I thought that the Direct Debit Guarantee ensured that all payments were to be taken on the date specified or the next available date if it fell on a weekend/bank holiday???
Could someone please help as I don't see the point in having direct debits if they can take the payments from you whenever they like!!!
How badly will this have damaged her credit rating?
Thanks!
Could someone please help as I don't see the point in having direct debits if they can take the payments from you whenever they like!!!
How badly will this have damaged her credit rating?
Thanks!
New Debt Journey: Pay off £19,622.91 by 30th April 2015 :T
Debt at Highest: £43,073 :eek:
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Just found these for you, both links confirm that uinder the direct debit guarantee they have to take payment after, not before, the agreed date, unless they advise you in advance.
http://www.bacs.co.uk/BACS/Consumers/Direct+Debit/Help+centre/Incorrect+payments/
https://msds.open.ac.uk/your-record/ousba/directdebit.htm
HTH
1 ask the company for compensation for talking the payments early .
2 ask the bank to reverse the DD because it was taken early .If you mention the DD guarantee the bank will reverse the DD .
My broadband invoice clearly states that "the money will be taken out either on the 24th of October, or soon after."
Low and behold, it is showing as paid out today the 22nd. I bank with Barclays.
peachyprice's first link doesn't work, but the second one does and I quote:
Why not pay by Direct Debit? Direct debits allow you, as a Bank or Building Society customer, to pay bills easily and conveniently, saving the time and trouble of writing and sending a cheque, or making that trip to your bank to pay in cash. We will automatically collect your monthly instalment on or shortly after the 5th of each month saving you the worry of making your payment on time.
To use the Direct Debit Scheme, a customer must usually hold a current account with one of the UK's banks or building societies.
The direct debit scheme offers a money back guarantee (the Direct Debit Guarantee), which means that the customer's bank or building society must give an immediate refund in the unlikely event that either an incorrect amount is collected or an amount is collected in advance of the agreed date.
Encouraging, and made me look forward to visiting Barclay's help desk on Monday morning.
But wait! What's this letter from the Financial Ombudsman Service in reply to a complaint like mine? http://www.consumeractiongroup.co.uk/forum/showthread.php?359-Early-Direct-Debits-Mean-getting-charged Post 17.
Ah, I see.The bank doesn't actually take your money early, it just say's it does. Well that's alright then, phew!
Hang on a second FOS, you say funds must be available on the previous day to the due dd, or a charge will be made. How do Barclays know that I won't be moving money into that particular account just before midnight on the day before?
My statement shows the dd went out today, (or rather midnight last night, a second after, to comply with the 22nd) so two days early.
I bet, had the money not have been there today, that Barclays would have charged me.
These B, blank, Banks have us over a barrel. Do you guess, I HATE THEM?
You do realise that the 22nd is a Saturday and a non working day. The next working day is Monday the 24th. Most banks will show Monday transactions from Saturday on their systems. They were doing this 20 years ago and is nothing new.
it does not mean the transaction is going through early. Its just that the systems can see some Monday transactions early and is preparing for them. It will not lead to charges and will not affect credit ratings (assuming the money is in the account the day before according to the T&C of the bank.
The bank has done no wrong here. You just done understand how it works. Your lack of understanding does not mean the bank has made an error. So, no need to hate them.
a DD cant come out of an account on a weekend. banks have a habit of ear marking payments (like if you use a debit card your available balance goes down)
if it is taken early, you can raise a DD indemnity claim with your bank under the Guarantee (doesnt revoke contractual responsibilities to make payments for something)
if you incur charges from early collection, raise a claim for consequential loss in the same way as the above.
the bank (any bank) has no control over when a direct debit leaves your account. It is the DD company that asks for the direct debit and them that decide the date.
This thread is now fully eleven years old...:eek: