Direct Debits & Bank Account Rules

lisa701

Really need your advice.
For 16 years I had a current account with Halifax and each month my wages did not go into my account until the same day as most of my direct debits came out. This was never a problem in 16 years and I did not have an OD facility.

However, because my mortgage company were having problems setting up a direct debit with Halifax (since discovered its an admin error by the mortgage company not the bank) I set up an account with the CoOperative. DD is the only way of paying my mortgage so it was essential this was set up. I spent nearly 2 months getting all my DDs shifted to this new account and I thought all was well. Sadly it is not.

Their rules are different. It does not matter if the money is in the account on the day the direct debit is to be deducted, their rules say it must be there the day BEFORE, with the result they rejected the most recent payment, which has incurred me a lot in charges.

Problem is I have no way of changing the day I am paid, and my mortgage company will not change the date of my DD Whilst this has been the case for 16 years and not been any problem its not going to work if I continue to bank with CoOperative.

I'm now in a stalemate situation and don't know what to do next.

Thanks, Lisa

nickyhutch

If the problem with the DD in the Halifax account was an admin error, can you not get it set up there again, correctly?

lisa701

Sadly no as I've since closed the account. You see I was under the impression the problem was due to the Halifax hence the reason why I changed to another bank. Its only after a long winded complaint with my mortgage company that I've discovered it was their fault after all!

rb10

It doesn't like there's any way that you can make the Co-op account work for you, unless you have the amount of your mortgage payment in a savings account that you can transfer in prior to your DD going out, so surely the simplest solution would be to open a new Halifax account?

It takes about 10 minutes online, or you may be able to get £25-£50 from them if you do it in a branch.

Paul_Herring

lisa701 wrote: »

Their rules are different. It does not matter if the money is in the account on the day the direct debit is to be deducted, their rules say it must be there the day BEFORE, with the result they rejected the most recent payment,

On a more general note, this is typical T&C on all current accounts (with the exception that it's the working day before[1], not simply the day before,) but it seems Halifax is a tad more leniant.

[1] Thus a payment due out the Tuesday after Easter should be funded by the latest, the Thursday the week before, not the Monday.

withabix

I presume that the mortgage lender will not change the payment date because it is already paid on the last working day of the month?

Most if not all lenders would consider that moving the payment into the following month (even by 1 day) would count as 1 payment being missed and hence being 1 month in arrears.

Probably not much use as advice to you (as it sounds like you probably haven't got the spare funds to do this), but you could resolve this problem by leaving enough money in your current account prior to payday OR change the dates on which you pay other bills to take this into account? Do you have the money in a savings account to cover your mortgage payment, which you could transfer in? If this is in a savings account, you won't lose out bcause the penalty fee for bouncing your mortgage payment once will undoubtedly be more than that amount of money will earn over several years anyway.

I know people who end up paying penalty fees on accounts because they miss payments due to them moving too much money out of their current account into a savings account 'beacause that means I am making money'. They blindly don't see that the £12/£20/whatever penalty is more than the money will ever earn in interest!

lisa701

Thanks for all your advice.
I don't have any savings otherwise I would not be in the situation I am now. The mortgage company don't need the money until the last working day but will not take a direct debit after 28th. I cannot use internet banking because I would still have to pay on 28th at the latest due to transfer times. Going to a branch isnt an option as there isnt one for 50 miles. Had both Halifax and Barclays accounts over the years and neither of them had the working day before policy (or if they did it was never enforced).

Looks like my only option is the 50 mile trek every final working day - not something my employers will be happy with!

Thanks again