Alliance & Leicester take DD's early?

TwistedPsycho

Good Morning Everyone.

Being an A&L customer for a few years now (against my better judgement) I have noticed a new trend in the way they deal with my account and wondered if anyone was having the same problems.

When my "1st of the month" DD's go out on a monday, like tomorrow, A&L have started to take the amountdue from my available balance on the Sunday morning. I have previously had interesting conversations with A&L; about when a company went to process a payment and changed their mind because they did not have sufficient ID for me and A&L ringfenced £400 on my account until the "holding time" expired, but anyway.

Although I am generally wise to it now and will transfer money between accounts prior to the Sunday, I have previously had my card declined on a Sunday because I would always transfer money out of my savings/bill money account into the current account on a Sunday night (thus preventing much damage with any card cloning).

Is this normal in the banking industry these days or are the bank deliberatly operating contrary to my DD instructions that the DD is taken on the 1st and not the day before?

hippey

Fairly normal.

Bank in the main only operate on a working day basis so electronic transactions for the next working day will be processed the night before so that they are there for the start of the working day and that the fate of those transactions can be decided by the relevant department (i.e. unpaids etc) however weekends causes a few issues and bank do deal with this differently, some will process everything on a Friday night, others on a Sunday afternoon. They are all a bit different there.

However as long as the transaction date is correct (in your case March 1st) they are not taking it 'early' mearly processing the entry ready for the start of Monday.

Also, most (but not all) banks need you to have cleared funds available the working day before payments are due. As an example you must have your £400 cleared by cut off on Friday afternoon for a D/D due out on Monday. This system goes back many years and has been the normal routine, most of them might operatre 'realtime' internet banking but the system behind that is stuck in the 60's!

Yes, there are loads of exceptions to this but in the main follow the idea that your money must be cleared the previous working day before payments go out and you will not go wrong. And confirm your banks cutoff time as they all vary.

gamesmad

Because the DD is scheduled to come out on Monday, your bank is getting the funds ready to be transferred on Sunday, to ensure that they will be in the recipients account on time. If it is important to you that the money comes out on the Monday, you can simply reschedule the DD for Tuesday.

Hope that helps

-Will

dzug1

gamesmad wrote: »

Because the DD is scheduled to come out on Monday, your bank is getting the funds ready to be transferred on Sunday, to ensure that they will be in the recipients account on time. If it is important to you that the money comes out on the Monday, you can simply reschedule the DD for Tuesday.

Hope that helps

-Will

But 'you' cannot 'simply' reschedule the DD - only the company taking it can. They may or may not agree and may not be efficient in actually doing it if they do.

And it doesn't get round the problem - just transfers it to a different date.

exel1966

TwistedPsycho wrote: »

When my "1st of the month" DD's go out on a monday, like tomorrow, A&L have started to take the amountdue from my available balance on the Sunday morning. I have previously had interesting conversations with A&L; about when a company went to process a payment and changed their mind because they did not have sufficient ID for me and A&L ringfenced £400 on my account until the "holding time" expired, but anyway.

Is this normal in the banking industry these days or are the bank deliberatly operating contrary to my DD instructions that the DD is taken on the 1st and not the day before?

Your money isn't leaving your account a day early (today), it's leaving tomorrow, the 1st as you have arranged.
It's only being earmarked today to go as funds have to be in place in the account at the close of play the previous business day. This is how they establish you have the necessary funds in place. It's common for the APACS system in which DD's are operated by banks.

masonic

dzug1 wrote: »

And it doesn't get round the problem - just transfers it to a different date.

The way to get around it is to switch to a current account that does not require the funds to be in place at the end of the working day before a payment is due. Some banks are quite generous about how 'late' you can transfer in funds to meet an outgoing payment.

hippey

gamesmad wrote: »

Because the DD is scheduled to come out on Monday, your bank is getting the funds ready to be transferred on Sunday, to ensure that they will be in the recipients account on time. If it is important to you that the money comes out on the Monday, you can simply reschedule the DD for Tuesday.

Hope that helps

-Will

It's the opposite, BACS D/D's are counted on day one, so for debits due the first the company would have processed them on Thursday (Entry day) for debiting on Monday, they will get any unpaids / stops on the report which they would get at the earliest on Wednesday this week.

Once the D/D's are run they cannot be moved, thats why most companies need 5 or so days notice.It's a straight forward process but its a case of understanding the whole process which most people would not realise.

TwistedPsycho

Thank you all for your responses.

I still find it quite strange that they are permitted to decline transactions on the Sunday morning because of the money going out on a Monday; especially when you could transfer money from the A&L savings to current account on a Sunday evening.

hippey

TwistedPsycho wrote: »

Thank you all for your responses.

I still find it quite strange that they are permitted to decline transactions on the Sunday morning because of the money going out on a Monday; especially when you could transfer money from the A&L savings to current account on a Sunday evening.

Check the T&C's it could be that A&L require money to be cleared the working day before payment which would be Friday.

Some bank systems just can't work in realtime, so once one working day reaches it's cut off then all transaction after that time will be for the next day therefore no cleared balance no transaction. Just think back to a time before banks had online banking and telephone banking, thats how the system actually works it's sooooooooooooooooooooo OLD!

masonic

TwistedPsycho wrote: »

I still find it quite strange that they are permitted to decline transactions on the Sunday morning because of the money going out on a Monday; especially when you could transfer money from the A&L savings to current account on a Sunday evening.

That would be too late. A&L's terms and conditions state the money has to be there at the end of the working day before a payment is due. That's by Friday at 5pm in this case.

qshed

We had a similar problem with them. My wages would appear on the system in the morning but by the end of the day they had moved to the last entry. Until we wised up this resulted in a few overdraft charges