Overdraft charge (debit card use)

justonemorequestion

Hi all

Today i spent about an hour on the phone to my bank after noticing that they had charged me £20 for excess overdraft. This was from my second account that i use as daily expenses account so only has a max of around £30-£40. I always check my balance daily before going to work to make sure that there is sufficient funds available if not i transfer from my main account. Recently I made a purchase, the funds had been debited, then a day or so later refunded then a day or so later taken again. So nub of the story is the bank says it because they only hold the funds for 24 hours and unless the retailer confirms the entry, if not they refund the money until the retailer applies for the money. (confused so far!!!!) anyway after talking to the rudest most patronizing customer service person in the world ever, final got to speak to her supervisor actually a quite helpful person (they do exists). Still, they will not refund the charge(s) because "computer says no"

My major problem - I have a debit card not a credit card, if i pay for a product or service with my debit card I expect the funds to be debited (clues in the title) from my account then, not appear if has gone then refunded then gone 3 days later. This is the 21st century one bit of machinery speaks to another piece of machinery in a nano second, heck there's even washing machines connected to the internet these days. So why cannot the banking system get it. Call me a conspiracy theorist but is this just not a new way of getting bank charges past us.

Q. is this just happening to me?
Q. if this has happened to you, have you received a refund of charges?
Q. what is the use of internet banking when you cannot trust the information given?
Q. if any, what's my next step?

Anyway mortgage is up, so guess who wont be getting the remortgage. Not sure if i can disclose the bank.

Thanks in advance.
Rich

withabix

Leave more money in your 'second account' and avoid the charges, which you have incurred because of the way you operate your accounts.

What you have described is the standard way that electronic payments work, so it is you that needs to change. Sorry.

dunstonh

Why do you think it is the job of the bank to manage your spending?

justonemorequestion

No I dont think it is the job of the bank to monitor my spending habits, I believe it is the job of the bank to supply me with current and up to date information. The reason i dont leave a larger balance is because this account is used in ATM and service stations all across the uk, and as the banks cannot secure their systems against freud this is the best way of securing myself. If i could, i would not trust any bank or to that fact "financial adviser" and have a very tall mattress....

On the this standard way electronic payment works, no its not if you are using a online system eg chip and pin, or even sign and accept and not a old hand held swipe machine the EPOS contacts a clearing bank to check for clear available funds, thats why a xmas your card takes for ever to accept due high levels of traffic. If there is clear funds your payment is completed otherwise declined. For a bank to say that the retailer must upload their transaction list before the transaction is complete is a total load of poo. the transaction has been clear and debited. This is basically the new cheque, banks dont wish to release funds to the retailer until their payment schedule is uploaded. Giving the bank 2-3 days of your money and depriving the retailer and confusing the customer. Why release the funds back into the customers bank account for any other reason?

any chance of answering this, i have run this account like this for 4 years without incident only in the last 2 months i have had a problem. Dunstonh please dont reply, so called financial advisers are not my favorite people.

justonemorequestion

let me qualify that last remark, anyone confessing to be an IFA, earns money by selling there financial knowledge and not receiving commission from any FI, any IFA worth their salt would not be giving out information for free on forums or blogs if there wasnt a payback for them.

jambosans

justonemorequestion wrote: »

If there is clear funds your payment is completed otherwise declined.

Only full authorisation or 'online' debit cards (e.g. Visa Electron) seek available funds for every payment. 'Offline' debit cards (e.g. Visa Debit) do not require available funds, and can be subject to a merchant's 'floor limit', allowing transactions below a certain amount to go through without seeking available funds.

justonemorequestion wrote: »

the transaction has been clear and debited.

Incorrect. The transaction has been authorised, the merchant's bank will debit (i.e. settle/ clear) payments in batch a few working days later.

justonemorequestion wrote: »

This is basically the new cheque, banks dont wish to release funds to the retailer until their payment schedule is uploaded. Giving the bank 2-3 days of your money and depriving the retailer and confusing the customer.

Nonsense. A pending/ earmarked/ authorised debit card payment is held against your available balance, your balance (the bit which earns interest) is unaffected until the transaction is debited.

justonemorequestion wrote: »

Why release the funds back into the customers bank account for any other reason?

Not every authorisation will debit, so instead of holding authorisations for prolonged periods of time, standard practice is to hold the authorisation for around a week (sometimes less depending on the bank). It's more of a convenience thing, 9 times out of 10 released authorisations do not debit.

No system can be 100% fool proof, so you still need to keep an eye on your account. If there's a smaller difference between your balance and available yet nothing reflected on your recent transactions, then this suggests an authorisation has dropped off. As I've said, it doesn't happen very often, but a lesson learned that you do need to micro-manage your accounts or start leaving a small "cushion" of money in your account to cover such eventualities.

justonemorequestion

just guess what card used, and floor limits are normally set at around £5, if you read the first post my bank has said that if any transaction is not confirmed within 24 hours the payment is refunded. This is not happening once its almost every 3 transactions. any chance you work for a FI by any chance....

jambosans

justonemorequestion wrote: »

just guess what card used, and floor limits are normally set at around £5,

Floor limits can vary, and not all terminals are online.

justonemorequestion wrote: »

if you read the first post my bank has said that if any transaction is not confirmed within 24 hours the payment is refunded.

Well your bank is an odd exception. Like I said before, generally speaking most banks will hold authorisations for up to a week.

justonemorequestion wrote: »

This is not happening once its almost every 3 transactions.

If you know it happens then why not take steps to avoid it happening again? A discussion with a manager in a call centre and disgruntled post on MSE is not going to change the way the UK debit card system works.

justonemorequestion wrote: »

any chance you work for a FI by any chance....

Asking questions like this and plastering your distrust of the world all over your signature does not discredit other posters. I've sourced my information, and given constructive advice, yet all you want to do is resort to rhetoric.

jamesd

The cards don't necessarily confirm funds are available and you've already encountered one way in which the operation of the systems can cause confusing balances. Best to operate with a balance that allows room for trouble or to seek a small overdraft facility to prevent charges if there's confusion again.

dunstonh

justonemorequestion wrote: »

let me qualify that last remark, anyone confessing to be an IFA, earns money by selling there financial knowledge and not receiving commission from any FI, any IFA worth their salt would not be giving out information for free on forums or blogs if there wasnt a payback for them.

What a pathetic little person you are. Going by your reckoning, that means every person who posts on this website is doing it to earn money. How much are you earning for this thread?

Dunstonh please dont reply, so called financial advisers are not my favorite people.

Don't worry. i wont be targeting you. I don't deal with the bottom end of the market.

justonemorequestion

Refunded, I think like the country as a whole, people need to grow a pair and start fighting back and not just accept the status quo. If you don't like my signature normally means your in the list. If you are happy to accept being charged £20 for an £1 overdraft for less than 24 hours then, no wonder this country is going to the dogs.