Cancelled DD reinstated by bank!

happyhaddock_2

Hi all, slowly getting back into the swing of things, but feel like I've been run over by a bus:o. Everyone has been wonderful and we had a lovely service for Dad which ironically he would of enjoyed;).

Need a question answering though as am rather annoyed at my old bank at the mo:mad:. When I changed to a basic account I cancelled all the direct debits but they have today re-instated one for my loan (with them) and taken it out of my current account causing me to go over my limit. Are they allowed to do this as I had previously cancelled it. I've cancelled it again today using my online banking, guess what they're going to take off me;) so will see if the payment get reversed:(.

Any advice gratefully received:)

nottoolate

happyhaddock wrote: »

Are they allowed to do this as I had previously cancelled it.

no

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm

happyhaddock_2

Thanks for that nottoolate, I was aware of the DD guarantee, but wasn't sure if this would apply as it's "in house" ie same bank loan and overdraft/current account. Surely they can't reinstate without authorisation though, and I'm likely to get charged on my current a/c now as am over the limit!. Furious is not the word lol.

postingalwaysposting

No they arn't supposd to do it. However you should have set up a basic bank account with a bank/building society you have no coonection with, ie you owe no loans/CC's/debts. It has been seen before (on mse) where people have had money taken from thier accounts/savings within the same bank to cover payments for debts that have been missed or now in arrears, sadly that is lawfull

happyhaddock_2

hi pap, had a new a/c for 2 months, the old account is just another creditor now with everything cancelled on it xx

DarkConvict

No they should not reinstate the DD, however if it is a long running DD they do often allow the creditor to reinstate it. You can reverse the DD transaction and claim back your charges as it was not an authorised transaction

This is however the least of your worries if you have debts and savings with the same bank, basically using the rule of offsetting they can use your savings/current account balance (inc overdraft) to pay any debts you have with them!
http://www.moneysavingexpert.com/banking/setting-off

Cleosmum

I used to have a managed loan with HSBC and I know the loan is attached to the account and the monthly payment cant be cancelled unless you pay the loan in full. Not sure how they processed it as it didnt fall under DD or SO.

DVardysShadow

happyhaddock wrote: »

Thanks for that nottoolate, I was aware of the DD guarantee, but wasn't sure if this would apply as it's "in house" ie same bank loan and overdraft/current account. Surely they can't reinstate without authorisation though, and I'm likely to get charged on my current a/c now as am over the limit!. Furious is not the word lol.

The answer here is that as the account is with the same bank as the loan, they can take from your account under the right of offset. It is not helpful to look at this as a Direct Debit.

postingalwaysposting

happyhaddock wrote: »

hi pap, had a new a/c for 2 months, the old account is just another creditor now with everything cancelled on it xx

You need to geta 'new' basic bank account with no links to any of your debts. Be careful though because some financial institutes/banks are interlinked. Generally though many on DFW and the BR froums use the Co-op as they are one of the more individual institutes.

Once you have a new bank acount don't set up direct debits only pay through postal order (if you are using token payments)/at the post office/at your (or the creditors) bank or a debit card (if you get one with your new account). That way your new bank account will be 'clean' and safe from any fees etc.

mad_bad_spender

I had the same problem with lloyds and as it took a while to get the housing benefit changed over to my new account every time money hit the account they would take it.

Not via DD though just straight from the account, like DarkConvict said they can do this and they can also use the overdraft. Lloyds were even sneakier as i had no agreed overdraft with them and then all of a sudden i do!! sneaky or what!!

I called them each time they took money and they did put it back but they took their time about it! Dont think they can take they can take benefits though so i think that is why they put it back without argument.

pure_dead_dopey

Hi Happy

Hope you are bearing up. If it is a DD they are NOT allowed to reinstate it, you just need to read the DD guarantee. I work with this daily so know this is the case. I'm not so sure about right of offset, I imagine they can only offset from funds and your overdraft is not funds, basically they are only moving your debt around to gain charges if they do it this way. If you feel up to it, complain in person to the branch, because it is outrageous. Alternatively write to complain, this is very dodgy practice and the whole point of the DD guarantee is to protect and give you as the consumer, confidence in the system.
take care and try not to worry about all this too much.

PDDxx