mortgage DD bounce advice

adm_4

Please can someone advise me on my position with respect to a fee charged for a bounced direct debit? I pay my mortgage via DD each month but today I did have the fees when they (the Woolwich) tried to take the money so the DD was returned unpaid. The fees are now available but The Woolwich tell me they can't try again and I need to send a cheque (I have the rest of the month so this is fine). However, they want to charge me a £27.50 for the DD bounce (not late payment because its not yet late!). Can/should I refuse to pay this? I tried on the phone but I was told it was the cost incured by the Woolwich for a bounced DD?! I'm assuming an internal cost and therefore one I can refuse?

Thanks,
Adam

AndrewSmith

I'm afraid you have already agreed to the fee by signing their terms and conditions when you originally took out and accepted the mortgage.

The fee will normally be added to your mortgage account. Do try and negotiate not paying it but I dont know how successful you are likely to be.

Andy

adm_4

AndrewSmith wrote:

I'm afraid you have already agreed to the fee by signing their terms and conditions when you originally took out and accepted the mortgage.

The fee will normally be added to your mortgage account. Do try and negotiate not paying it but I dont know how successful you are likely to be.

Thanks,
However, I think the agrument goes that even though you sign up to the fees in the T&C you can still fight payment if the fees are unreasonable - this is the case with CC late payment fees.

Astaroth

But remember they can also cancel the mortgage and ask for all the money to be paid immediately.

If you think the T&Cs are unreasonable why did you sign them?

adm_4

Astaroth wrote:

But remember they can also cancel the mortgage and ask for all the money to be paid immediately.

Can they really? I don't know...

Astaroth wrote:

If you think the T&Cs are unreasonable why did you sign them?

This argument doesn't apply to CC late payment fees to why here? The fees have to be proportionate to the cost incurred and if they are not they are not enforceable even if they are in the T&C?!
I appreciate the mistake is mine and am quite happy for this to be a "gesture of goodwill".
I just got off the phone and this fee is an internal admin fee. I don't consider £27.50 justifiable! I've told them on the day of the DD that it bounced and that the funds are now available - they've incurred NO costs so far and need not since told them I'll pay up by cheque BEFORE the amount is due!
Oh well...

Tootsie_Roll

adm wrote:

- they've incurred NO costs so far

Really ? How many people have you called and spoken to ? How many other people internally have 'touched' your account due to the payment bouncing ?

All costs which are easy to overlook I'm afraid.

TangentMan

Is your DD from an account held at another bank (i.e. not a Woolwich account)? If so then the Woolwich may have incurred a fee from BACS (or APACS or which ever interbank system DDs are done via).

My personal view on the OFTs proclaimation (and yes their proclaimation of late charge for CC would include bounced DD charges) is that they are not championing the general consumer - they are heralding the end of the most sophisticated free banking system in the world.

Tootsie_Roll

TangentMan wrote:

Is your DD from an account held at another bank (i.e. not a Woolwich account)? If so then the Woolwich may have incurred a fee from BACS (or APACS or which ever interbank system DDs are done via).

My personal view on the OFTs proclaimation (and yes their proclaimation of late charge for CC would include bounced DD charges) is that they are not championing the general consumer - they are heralding the end of the most sophisticated free banking system in the world.

That's exactly my view and frankly I have little sympathy for those that have incurred massive bank charges.

regularsaver1

At the end of the day the money was not there when the direct debit was called for and so it bounced - in fact the funds should be there in advance - the fee is appropriate

homer_j_3

At the end of the day 27.50 is a punitive charge and under UK contract law it is unlawful for a company to do this.

A mortgage company can claim liquidated damages for the actual loss incurred. Liquidated damages would be the true cost of recovering the losses involved of the DD being bounced. I doubt that this is 27.50 in the automated world.

If you can argue that this is the case then no court would allow the woolich or any other bank/lender enforce this charge.

I would politely ask them to waive the fee rather than getting into an argument with then on this instance if it is the first time of doing it and if they refuse, pm me and I will help you get it back.