Debit card test transactions took us over our overdraft limit.

poohbear59

We have had a very difficult few days trying to juggle our finances and avoid going over our arranged overdraft.

By borrowing cash from family we thought we had managed to stay within our limits and still make direct debit payments so we were horrified to find that a cheque we wrote out recently has been returned. When I phoned the bank, they told me that there are five £1 debit card transactions on the account, which when added to the cheque, took us over our arranged overdraft by 78p.

At first I thought they said '£5 debit card transaction' and I accused DH of having used the debit card when he knew we had no available balance to use. I rang back and they explained what had happened on our account.

The customer service rep at the bank said that 'tester transactions are a relatively common occurrence. They don't usually tell customers about it as it is 'difficult to explain'. Some petrol stations and online companies such as 'Amazon' do a £1 debit card check on the account when someone makes a payment. If a few have been made then they mount up on the account. These 'check payments' are not actually debited but make the £1's unavailable and therefore change the available balance.
I hope this makes sense, maybe someone else can explain it better than me.

I just want to warn people of 'hidden transactions' that they may not know about that can make a difference to their available balances and take them like us over our limit and into bank charges.

DH has asked me to post this on here and to tell 'my friend Martin' so that he can warn other people about the sneaky moves made by companies. The transactions the £1 debits relate to are long gone, not even this month!

jonesMUFCforever

The £1 'testers' are never debited to your account so IMO it was bad maths which made you go over your overdraft limit - sorry.

poohbear59

The bank tell me that they are not debited but are on the account reducing the available balance. But thanks for your help.

callum9999

jonesMUFCforever wrote: »

The £1 'testers' are never debited to your account so IMO it was bad maths which made you go over your overdraft limit - sorry.

It's not bad maths because although the money doesn't actually disappear, it becomes unavailable - just as if it has been withdrawn.

iblametheparents

They do actually get debited from your available balance, so you can be charged for going over your overdraft limit, or for another transaction bouncing.

zppp

callum9999 wrote: »

It's not bad maths because although the money doesn't actually disappear, it becomes unavailable - just as if it has been withdrawn.

I think what you will find is that JamesMCFCforever is reffering to that fact and that other transactions have taken the account overdrawn, not the tester transaction, as that will be pending for authorisation.

zppp

iblametheparents wrote: »

They do actually get debited from your available balance, so you can be charged for going over your overdraft limit, or for another transaction bouncing.

Well that is not the case with RBS/Natwest, so I doubt it is widespread. They will only charge for where the retailer claims the pending payment on the account taking the account overdrawn. (As authorisation drops off 48 hours after the transaction or the authorisation can be cancelled if it is a hotel for example)

iblametheparents

With Barclays, Guaranteed Tranasaction & Returned Transaction Fees are based upon the available balance, not the statement balance.

jambosans

iblametheparents wrote: »

With Barclays, Guaranteed Tranasaction & Returned Transaction Fees are based upon the available balance, not the statement balance.

Are these charges applicable on the basis of something other than the pending authorisation causing an unauthorised overdraft on the available balance?

I will give you an example to illustrate my point: you have a balance of £10, and due to a pending debit card payment of £15, an available of £0. The pending debit card payment technically caused an available of -£5, but no charge is applicable because the payment has not been settled. A Direct Debit for £10 then debits, the balance drops to £0 but due to no available balance, a Guaranteed Transaction Fee is applied to the paid Direct Debit.

If the above scenario is what you infer in your post, then I believe there's been some crossed wire between yourself and zppp - they were pointing out that generally speaking a pending debit card payment which technically causes an unauthorised overdraft (through the available) will not cause a charge until settled, and the payment is reflected in the balance.

poohbear59

It does appear that banks have different ways of dealing with tester debits. Two have gone already but I still have three on the account. We haven't used a debit card for about 10 days and all those debits have cleared.

I just wanted to make people aware so the same doesn't happen them. I have never let my bank account go down to such a low balance before this last week.