Virgin Credit Card: balance cleared, direct debit cancelled and charged a default fee

noh

Skellers wrote: »

I believe the charge was for the refused direct debit, but I didn't owe them anything on the balance, I didn't owe them any interest as it was an interest free period, balance was cleared 2 weeks before direct debit would have been taken otherwise, so no reason for them to take £25 as far as I can see?! £25 puts the balance in credit. Notwithstanding that, other advice on these boards is that when a DD is canceled, the bank sends the originator a notice saying it has been canceled......

The reason they attempted to take the DD was that they had stated that would happen.
"Your Direct Debit payment will be taken regardless of any additional payments you make......."

Yes they would have received a notification that the DD was cancelled but that would no stop them trying to collect the amount as stated on your bill and charging you £12 when it failed.

You made an incorrect assumption that they would not try to take the £25 despite the statement above, which has been on the back of all the bills you have received, over the last 15 months.

MBNA are not the only CC provider that operate in this way.

Having said that I think it is likely that they will refund the penalty fee as a gesture of good will.

chattychappy

This kind of fiasco is why I've never signed a DD! So much for making life easier...

The interest remains a mystery if you were in the interest free period... any ideas anyone?

Skellers

I appreciate all of your views and comments, thanks.

Does a failed direct debit affect my credit rating as say, a non-payment would?

fozmcfc

chattychappy wrote: »

This kind of fiasco is why I've never signed a DD! So much for making life easier...

The interest remains a mystery if you were in the interest free period... any ideas anyone?

I don't think there was any interest, but even with a £0 balance Virgin will try to take a direct debit payment, so unless you tell them to cancel it, they will try and then charge you for a failed direct debit.

YorkshireBoy

Skellers wrote: »

Does a failed direct debit affect my credit rating as say, a non-payment would?

You may find they report a '1', meaning payments are up to one month in arrears, for both cases.

As such, and because your payments were actually up to date, you may want to check they haven't unfairly 'marked your card' for you.

Just on the "why did they still take the money?" issue, and to add to 'noh's' post above, when you signed up to the DD you were sent a confirmation letter. Within it is the following text...

"Important: Confirmation of the set-up of your Direct Debit Instruction

If you make manual payments to your account once the direct debit has been activated, these will not reduce the amount that we will collect by Direct Debit, unless you advise us at least seven working days prior to the Direct Debit being collected."

If you search this forum (top right of your screen) for the words "important confirmation direct debit" (without the quotes) you'll see that you're not the first, and certainly won't be the last, to experience this.

Just so you know for future, and to reinforce what it says in the DD guarantee, you should also let the originator know you're cancelling the DD with your bank.

chattychappy

fozmcfc wrote: »

I don't think there was any interest, but even with a £0 balance Virgin will try to take a direct debit payment, so unless you tell them to cancel it, they will try and then charge you for a failed direct debit.

Yep. But the OP said "They have charged me a £12 default fee and £7.84 interest." I wondered what the interest was for as he believed he was in the interest free period.

staffie1

chattychappy wrote: »

Yep. But the OP said "They have charged me a £12 default fee and £7.84 interest." I wondered what the interest was for as he believed he was in the interest free period.

It might be that once you default, you immediately revert to an interest charging account and the default fee would attract interest..? Might explain it.

IWantToBeFree_2

The default fee couldn't have amounted that much interest though...

td_007

Skellers wrote: »

I cleared the whole balance 2 weeks before the direct debit was due. I cancelled the direct debit assuming that a notice would be sent to Virgin telling them of the cancellation and made the reasonable assumption that they wouldn't be taking anything any more because the balance stood at zero. Virgin have tried to take £25, despite the balance being cleared 2 weeks beforehand. They have charged me a £12 default fee and £7.84 interest.

The basic premise of direct debit is that it gives the customer the power to set it up and the power to cancel it. You have canceled the dd (you are under no obligation to inform Virgin, it is suggested that it would be helpful to inform them - no more!) and as a result you have canceled the authority you had given Virgin and therefore they cannot claim that the dd was rejected.

The t&c with regards to dd (i.e. take dd irrespective of payment made) holds only if you have continued to give them authority. In absence of you having withdrawn authority they do not have any right to take your money and therefore do not have the right to charge for it being rejected. In this case quoting the t&c as above is irrelevant and is not applicable. I would simply demand that they refund any so called charges and interest that they have imposed on you based on this explanation.

unidentified

You may find they report a '1', meaning payments are up to one month in arrears, for both cases.

As such, and because your payments were actually up to date, you may want to check they haven't unfairly 'marked your card' for you.

Can the OP confirm what happened in regard to this?

Did the CC company report a '1' or what happened in the end?