Bank Charge for system error

jemmahowells

About a month ago I did some shopping at Asda on a Saturday for around £50, stupidly I was in my own world and took my card out of the chip and pin before it was ready so had to go through the process again. There was £360 in my account at the time so enought to cover a £50 spend.

On the Monday I had a direct debit due to go out of £300 but when I went online, the direct debit had been bounced for no reason. When I called the back to ask what had happened I was told that Asda had requested £50 twice and the bank had 'held' the payment, in the meantime the direct debit request was made and because there was £100 'on hold' for Asda and not enough money available the direct debit bounced. Later on that day the £50 on hold was 'released' into my account

I have been charged £30 for this which I am not happy about. Nationwide say take it up with Asda, Asda say they won't pay as this sort of thing happens everyday and the bank should see it was a system error and not mine! No one will budge.

Is there anything that I can do???? Would really appreciate some advice.

samjef11_2

jemmahowells wrote: »

About a month ago I did some shopping at Asda on a Saturday for around £50, stupidly I was in my own world and took my card out of the chip and pin before it was ready so had to go through the process again. There was £360 in my account at the time so enought to cover a £50 spend.

On the Monday I had a direct debit due to go out of £300 but when I went online, the direct debit had been bounced for no reason. When I called the back to ask what had happened I was told that Asda had requested £50 twice and the bank had 'held' the payment, in the meantime the direct debit request was made and because there was £100 'on hold' for Asda and not enough money available the direct debit bounced. Later on that day the £50 on hold was 'released' into my account

I have been charged £30 for this which I am not happy about. Nationwide say take it up with Asda, Asda say they won't pay as this sort of thing happens everyday and the bank should see it was a system error and not mine! No one will budge.

Is there anything that I can do???? Would really appreciate some advice.

Complain to your bank and if they won't would move say you gonna take this to the The Financial Ombudsman Service. Also phone for customer services and demand for a manager.

Olipro

Tell Nationwide that you will take the case to the FOS, considering that'll cost them £300 they'll quite possibly back down at that point.

However, let this be a lesson that using bank cards for payments is really a crap idea if you're someone who is living close to the edge. the whole system of amount authorisation was designed for credit cards and as you've discovered, can be very detrimental.

my advice? get a credit card.

samjef11_2

Olipro wrote: »

my advice? get a credit card.

Whats happens if he can't get a credit card one ie poor credit score not the best advice either

Mark_In_Hampshire

Did Asda really say that?! e.g. you bank should have realised Asda's mistake?

This is a tricky one because you're not in a position to prove who is telling the truth and whose "system is in error".

On balance, I'd say your Bank are in the right, and Asda are the culpable party.

However since only the correct amount was actually eventually debited (the second authorisation dropped away because the funds weren't captured) Asda haven't actually stolen anything from you as such.

Do pop back and update us on how you get on with this.

Olipro

samjef11 wrote: »

Whats happens if he can't get a credit card one ie poor credit score not the best advice either

then the only alternative is to have 2 separate accounts;

1) a cash-card account which you use for payments
2) your regular account which you use for DDs and the like.

samjef11_2

Olipro wrote: »

then the only alternative is to have 2 separate accounts;

1) a cash-card account which you use for payments
2) your regular account which you use for DDs and the like.

That sounds a good system to me.

Mark_In_Hampshire

Olipro wrote: »

However, let this be a lesson that using bank cards for payments is really a crap idea if you're someone who is living close to the edge. the whole system of amount authorisation was designed for credit cards and as you've discovered, can be very detrimental.
my advice? get a credit card.

Replace "bank cards" with "direct debit" and I'd agree with that in part. The charge resulted from the direct debit failure. However people should not have to keep hundreds or thousands of pounds in their current account just in case mistakes occur. Declined card payments cost nothing, declined DD payments cost a fortune.

Current accounts should not need to be run with a balance - the money is better off in a savings account even if only temporarily. However if you use DD then you need to have a buffer balance to prevent charges whether mistakes by the bank, the payee, or your own oversight.

samjef11_2

Mark_In_Hampshire wrote: »

Replace "bank cards" with "direct debit" and I'd agree with that in part. The charge resulted from the direct debit failure. However people should not have to keep hundreds or thousands of pounds in their current account just in case mistakes occur. Declined card payments cost nothing, declined DD payments cost a fortune.

Current accounts should not need to be run with a balance - the money is better off in a savings account even if only temporarily. However if you use DD then you need to have a buffer balance to prevent charges whether mistakes by the bank, the payee, or your own oversight.

You mean like a buffer limit some basic bank account have like a £10 buffer limit like a small overdraft in other words.

Olipro

Mark_In_Hampshire wrote: »

On balance, I'd say your Bank are in the right, and Asda are the culpable party.

Wrong, neither are culpable.

each time you insert your card into the terminal you are implicitly giving permission for the merchant to obtain authorisation for the amount due.

She removed the card prematurely thereby preventing the transaction from completing, thus the transaction was deemed cancelled, however, since the card was removed, the authorisation can't be voided because the account information in inaccessible (card was removed) and unfortunately, the terminals don't have the sort of database access that allows them to check if authorisation was already obtained on a card.

Sadly, had she had an overdraft available or had Nationwide not deemed her a credit risk and simply allowed the DD to go through, she wouldn't have been charged anything at all since authorised amounts don't classify as overdrawn funds.

Olipro

Mark_In_Hampshire wrote: »

Replace "bank cards" with "direct debit" and I'd agree with that in part. The charge resulted from the direct debit failure.

And the direct debit failure resulted from the double authorisation... blame the cause not the symptom.