DD cancelled by Nationwide

jkmum

I have a DD to pay off the minimum amount on my Nationwide credit card. I then take off the minimum amount from the total amount due and may this through online banking. Simple! I have done this with no problems since forever. However, last month the DD was not taken out. On emailing Nationwide this is the response I have got:

"Each month we will call for the direct debit 3 working days before the direct debit is due taken to allow time for the payment to be processed for security reasons and to be cleared and credited in time.

If you make a manual payment or receive a refund and it is credited to your account over 3 working days before the direct debit is due to be taken we will cancel the direct debit instruction (if the payment is over the amount due to be taken) or readjusted the direct debit accordingly (if the payment is less than the direct debit due to be taken)."

Is it just me or is this really complicated for something that should be simple? Also, is this normal for credit cards?

lisyloo

This is perfectly normal.
They have to send their instructions in advance.
If you make your payment AFTER the instruction has gone, then the min payment will be taken.
If your payments in made BEFORE the instruction is gone, then they will adjust their payment because you've instructed them to take the minimum ONLY and if that's already been paid then they will adjust accordingly.

It's quite simple and perfectly normal for credit cards, they all do it.

jkmum

But surely to the layman, the fact that you have requested the bank to take the minimum amount by DD means this is what you assume will happen, regardless of what payments you have made. I have now ended up being charged interest.

I can understand cancelling the DD if the full amount has been paid, but not if there is still a balance to pay because you have assumed the DD will cover this.

The added complication is the time it takes from making the payment to it being credited, if you have to pay after the DD instruction has been taken (3 days before payment date) but obviously before the due date, you don't get much leeway in the timescale to pay. If I know I'm going to be busy, I'll often pay a week or so beforehand and depending on how long the bank decide to take to pay it could come before or after the 3 day period.

I also think the bit that I actually find complicated is the last bit about the amount being either more or less than the DD. It means that I can't just continue with what I thought was a simple payment, I have to take amounts and dates into consideration too.

Get it wrong and I'll get charged interest (as I have on this occasion) or I'll end up paying the whole amount and the DD payment will be taken out too.

Tixy

Its how they work.

If you don't want to be charged interest you can set up the DD to pay the balance in full each month.

lisyloo

But surely to the layman, the fact that you have requested the bank to take the minimum amount by DD means this is what you assume will happen, regardless of what payments you have made

What it actually means is that your DD will be adjusted by any other payments you make IF they arrive before the instruction is sent.
FWIW I think your assumption is reasonable BUT you are making an assumption and if money (charges) depend on it then you probably shouldn't jsut assume, you should ring up and find out or read the info you were sent if it's there.

I agree with you it's difficult because it's hard to know the timing especially when there are weekends, bank holidays etc.

Any reason you don't jsut pay the whole lot by DD?

jkmum

lisyloo wrote: »

you are making an assumption and if money (charges) depend on it then you probably shouldn't jsut assume, you should ring up and find out or read the info you were sent if it's there.

Assumption is probably not the right word I used - this is how I understood it to work and had until now no reason to think it was any different and that there was anything to clarify by phone or by reading T&Cs - I have been paying my CC this way for years and am now surprised this is the first time it has happened. Fortunately I learned my lesson on a £6 bill so the interest charged is pennies - thank goodness it wasn't the one from after my holiday!!

I am going to change it so the whole lot is paid by DD in the future. I could bang on about wanting the flexibility to not pay in any particular month but tbh it's easier for me to make sure there's enough funds in my a/c to pay the whole amount off than to work out the best day to pay.

Thanks for helping to clear things up for me.

DesG

And just to confuse the issue, there are some credit card providers (MBNA that I know of) that will take the minimum payment by DD even if the whole balance is paid off well before the DD is due, that has caught others out too.

Cheers, Des.

lisyloo

this is how I understood it to work

But you didn't understand it correctly.
You did not get the facts from Nationwide about how their banking/computer systems work. Instead you made some assumptions on the basis of your experience.
That is not unusual or particularly unreasonable but you have to recongnise it can be flawed when you make ssumptions rather than gather the facts.
I'm not saying this to have a go, but so that you can recognise this (very common) error in your thinking so that you might not make the same mistake again.
None of us know how the internal systems of companies work unless we either work there or ask and find out.

You copuld explain the situation and ask for the money back.
If you are generally a good customer and it's a first offence then they do have some discretion and you might get it back (a small amount might not simply be worth the phone call).

I am in a simialr posistion.
I am very organised and prefer to make my own payments.
In cases where a DD is mandatory I have it set to the whole amount.
In cases where it's not mandatory I prefer to pay it myself.
For a lot of people DD is great, but I prefer to be in control and as I check my finances daily there is no chance of me forgetting.

If I do make a payment where a DD is in place, I try to make it AWAY from the DD dates, so that I know it's included.
The problem with trying to guess is that you would need to know how they cope with weekends and bank holidays.
You might be able to guess that but it would be a guess and I try to avoid that.

jkmum

I have managed to get the 13p refunded! (was done via email or like you say it would not have been worth the phone call)

I understand your point about asking if you're not sure, but how can you ask something if you are not aware the question/problem exists? (in my job I would never assume that my customer would know the questions to ask me - it's my job to tell them the answers to the questions they never thought to ask) However, even now that I understand the process, I don't think it's in the interest of the customer - I was told it's to avoid over-payments - however, if I pay the full amount before the 3 days before the DD is due to be taken, but because of a w/e, bank holiday or because there is an R in the month, the payment takes a couple of days longer than expected, I will end up with an overpayment anyway...

Have reached a point of understanding the process, but still not understanding the logic - will change DD to full amount & sleep easy tonight!

chattychappy

jkmum wrote: »

Is it just me or is this really complicated for something that should be simple?

Yep... seems complicated to me!

jkmum wrote: »

But surely to the layman, the fact that you have requested the bank to take the minimum amount by DD means this is what you assume will happen, regardless of what payments you have made.

Yep, that's what I would think. I'm a layman too.

DesG wrote: »

And just to confuse the issue, there are some credit card providers (MBNA that I know of) that will take the minimum payment by DD even if the whole balance is paid off well before the DD is due, that has caught others out too.

Yep.. I've never signed a DD in my life. They just seem so confusing... Would rather remain in control of what's going on. Sure people get upset when they forget a payment, post here and provoke the DD brigade to chirp up... but I don't like them in principle or practice.

chattychappy

lisyloo wrote: »

But you didn't understand it correctly.
You did not get the facts from Nationwide about how their banking/computer systems work. Instead you made some assumptions on the basis of your experience.

I feel that's a bit harsh. If Nationwide hasn't published what it will do in the event someone makes a manual payment, but do allow people to set up DDs to take the minimum payment then I think it's reasonable to expect that that is what it will do. The onus is on them to tell you if they're going to deviate from collecting the minimum by DD rather than expect you to mount a pre-emptive investigation into their IT systems. (Does depend on the wording though.)

lisyloo wrote: »

I am very organised and prefer to make my own payments.
In cases where a DD is mandatory I have it set to the whole amount.
In cases where it's not mandatory I prefer to pay it myself.
For a lot of people DD is great, but I prefer to be in control and as I check my finances daily there is no chance of me forgetting.

If I do make a payment where a DD is in place, I try to make it AWAY from the DD dates, so that I know it's included.
The problem with trying to guess is that you would need to know how they cope with weekends and bank holidays.
You might be able to guess that but it would be a guess and I try to avoid that.

Yep, in the end you have to be pragmatic about these things. Whatever the principle, it's best to work out how they work so as to avoid having arguments about these things.