Charged for DIRECT DEBIT taken early (even though funds available!)

bengeorge

I have been charged for a returned direct debit. I wouldn't complain if I had genuinely missed the payment, but the evening before it was due I made sure there was enough money available by making a direct transfer online from another account with the same bank.

At the time I made the transfer the Direct Debit had not been taken and my transfer did show up.

However I have been charged for having the DD returned as the bank say that the process of taking a payment by Direct Debit starts the day before it's due.

How on earth is this fair? The due date is the due date, how can payments be effectively taken a day early?

I looked in this forum but couldn't find anything on this aspect of Direct Debits.
Surely I'm not the only person this has happened to?

Is there anything I can do about it?

Advice would be appreciated..

opinions4u

Who is your bank?

What do your account terms and conditions say about funding the account prior to payment of a direct debit?

Mikeyorks

bengeorge wrote: »

However I have been charged for having the DD returned as the bank say that the process of taking a payment by Direct Debit starts the day before it's due.

With a lot of Banks that is true for DDs due out on a Monday. The funds need to be there the working day before ... which is Friday.

davethorp

As others have said it does depend who you bank with and what the terms and conditions are. I do know that Natwest/RBS will clear a DD as long as funds are received by 14:30 on the day the payment is taken. We use this to good effect by having money sitting in a savings account and transferring any payments needed to a bill payment account as and when the DD's are debited. I've always felt that if a payment slips your mind and takes you overdrawn, you should be given a window of opportunity to correct the mistake before the banks hit you with their nice array of charges

Only suggestions I can make are ask the bank nicely for the charge back though I'm guessing as you've been in contact with them you've probably already done that. Failing that either deal with any future direct debits as your bank dictates and make sure funds are available by close the day before or switch to a bank like RBS/Natwest (and there may be others) who handle DDs in a much nicer way

david39

LLoydsTSB also work on the principle that they will not charge as long as the funds are in place by the afternoon (3.30, I think) of the day that the account is shown as overdrawn.

JohalaReewi

On the other hand, HBOS play hardball. The cleared funds must be in the account the day before because the DDs and SOs go out at midnight.

They even do the outgoings before doing the electronic money in so you can be overdrawn for a few microseconds and get stung big time for fees. The online and paper statements however, show the money coming in first. So you can be unaware of the problem until you get the fees letter.

noh

JohalaReewi wrote: »

On the other hand, HBOS play hardball. The cleared funds must be in the account the day before because the DDs and SOs go out at midnight.

They even do the outgoings before doing the electronic money in so you can be overdrawn for a few microseconds and get stung big time for fees. The online and paper statements however, show the money coming in first. So you can be unaware of the problem until you get the fees letter.

That's not the case with the Reward Accounts.
From the website

"With a Reward Current Account you won’t have to pay any other fees if you go overdrawn, so you need never worry. It makes perfect sense. What's more, we won't charge you any fees, as long as you pay in enough money to bring your bank account back into credit by the end of the day."

david39

I wonder whether that applies to premium (monthly-fee) accounts with other banks.
My bank account terms with LloydsTSB (referred to above) is for one of their added-value accounts - so it may not apply to their basic, free account.

jambosans

noh wrote: »

That's not the case with the Reward Accounts.

Or with the Current Account; or the Ultimate Reward Current Account.

The only Halifax accounts which will still charge for unpaid items, or paid items (even if funds are paid in before the end of the day) are the:-
Student Current Account, Easycash, and Cardcash.

JohalaReewi

jambosans wrote: »

Or with the Current Account; or the Ultimate Reward Current Account.

HBOS customer staff disagree. They did this to me twice and both times claimed that the money had to be in the account on the day before. If it arrived on the same day, it was too late. Maybe they have recently changed the T&Cs?

jambosans

JohalaReewi wrote: »

HBOS customer staff disagree. They did this to me twice and both times claimed that the money had to be in the account on the day before. If it arrived on the same day, it was too late. Maybe they have recently changed the T&Cs?

Every current account (except the Student Current Account) changed on the 6th of December 2009 to a new charging structure. Under this new structure, if a transaction takes you into an unarranged overdraft you are charged £5 per day until you bring the account back in credit/ within the agreed overdraft. You have until the end of the day to credit the account (technically 00:00), to avoid being charged for said day. If the bank refuses to make a transaction due to insufficient funds you are not charged.

Good practice should be to have cleared funds in the account by close of business the working day before. However, the new charging structure is less strict, as it's now possible for the bank to make a payment causing an unarranged overdraft, but no charge is levied because you rectify the overdraft before the end of the day (for example).