Daylight Bank Robbery

NightStar

On this particular month a large direct debit for my credit card (£1600) was scheduled to leave my account on the Sunday. Being a Sunday it would happen on the next working day so Monday instead. I had planned to make a large transfer in on the Monday to cover it. As long as everything is done by the end of play on the same day this is normally fine.

I logged in online just after midnight on the prior Saturday to make a payment to a family member. I knew I had enough cash to cover this and last me the weekend (£500). To my horror Barclays had 48 hours early started the direct debit process putting my account £1100 negative and denying me access to my £500! The transaction was dated correctly for the Monday.

I know this is only 48 hours early but it is plain wrong especially when it is dated correctly ahead of time. Why are the banks allowed to do this ?? I wrote to them and get this; they said,'it prevents customers inadvertently drawing funds from cash if they will be required to cover items due for payments the following working day'. I have successfully managed my money so far in my life without ever going overdrawn once, I don't need a bank 'looking after my finances' and stealing from me.

Olipro

Not all banks do this, and it does work both ways; any BACS credits due to go in on monday will be made accessible to you on the Saturday.

Additionally, you won't be charged any fees for overdraft purposes until the monday comes, so if for example you had a DD going out on the monday that would have put you into an unauthorised overdraft, you have 48 hours to reconcile it.

opinions4u

NightStar wrote: »

On this particular month a large direct debit for my credit card (£1600) was scheduled to leave my account on the Sunday. Being a Sunday it would happen on the next working day so Monday instead. I had planned to make a large transfer in on the Monday to cover it. As long as everything is done by the end of play on the same day this is normally fine.

I logged in online just after midnight on the prior Saturday to make a payment to a family member. I knew I had enough cash to cover this and last me the weekend (£500). To my horror Barclays had 48 hours early started the direct debit process putting my account £1100 negative and denying me access to my £500! The transaction was dated correctly for the Monday.

The collecting company decides when to initiate a direct debit. Not Barclays.

Barclays tell you "You must ensure that you have available cleared funds in your personal current account to enable us to honour all your cheque, debit card, Direct Debit or standing order payment instructions when we receive them."

In other words, you need to fund your account the working day before a direct debit is due.

I know this is only 48 hours early but it is plain wrong especially when it is dated correctly ahead of time. Why are the banks allowed to do this ?? I wrote to them and get this; they said,'it prevents customers inadvertently drawing funds from cash if they will be required to cover items due for payments the following working day'. I have successfully managed my money so far in my life without ever going overdrawn once, I don't need a bank 'looking after my finances' and stealing from me.

If they've stolen from you, walk down to the police station and make a formal accusation of theft. It's as simple as that.

chexum

NightStar wrote: »

On this particular month a large direct debit for my credit card (£1600) was scheduled to leave my account on the Sunday. Being a Sunday it would happen on the next working day so Monday instead. I had planned to make a large transfer in on the Monday to cover it. As long as everything is done by the end of play on the same day this is normally fine.

Normally fine? I don't think it ever worked that way. Direct debits on a working day certainly leave the account before most of the country wakes up. Someone described how exactly it works, (may chime in again), it's like between midnight to 2AM, and if some funds came in, there will be an additional run afterwards to collect DDs without bouncing those. If you don't have sufficient overdraft in place, you need to fund your account not much after midnight the day the DDs leave. (If you do have overdraft, I'm not sure if they would charge you the daily interest though, when you can cover it the same day with faster payments/cash).

Additionally, I think you missed the "Date" field in this case. As an extreme example in the reverse, over the bank holiday weekend, I could already see my salary going in on the next week, with the date being the 31st. I could also transfer the usual amount to savings on Saturday, which was still recorded with the date being Tuesday. Direct debits are somewhat similar, what you have seen is Monday's DD already showing up prepared on the balance before Monday.

The only thing that was interesting to me, that these transactions were added to the "current cleared balance", but I can't even think of saying they "robbed" me of the interest of the transfer, as technically the salary didn't even arrive!

I'm afraid if you plan to make same-day transactions (paying Monday's DD on Monday), you have to understand and/or clarify how the bank's systems work. You can't assume it's working the way you expect or even how it would be convenient for you

Fiddlestick

You could claim indemnity under the DD Guarantee if you *really* think they have acted incorrectly.

If the payment was due for the Monday however then I'm pretty sure they are allowed to present the instruction beforehand to ensure that they are paid on the Monday.

MrOrchard

They're perfectly at liberty to do this, it's your responsibility to have the funds there. DDs are always a moveable feast, unlike standing orders.

Fiddlestick

MrOrchard wrote: »

DDs are always a moveable feast, unlike standing orders.

No they aren't.

There are strict guidelines laid down about how and when an organisation can present a DD for payment.

If they fall outwith the time limits allowed under the scheme then you can ask your bank to indemnify you under the DD Guarantee and they *must* return the money to you.

MrOrchard

Moveable within a few days (which is the timeframe in question in the OP) - obviously not completely arbitrary, though I didn't think I'd need to quantify that in the post as we're not talking about a big time difference.

jambosans

Fiddlestick wrote: »

You could claim indemnity under the DD Guarantee if you *really* think they have acted incorrectly.

You can't claim under the Guarantee as there has been no error or change in date (without prior notification) as the payment is post-dated Monday. The eventuality that Barclays pre-process the payment is covered by the T&C's which the OP has agreed to.

AnonymousForObviousReason

As the DD Guarantee would seem only to give back the payment (which isn't under dispute) wouldn't this be of little use now? There were no charges arising from this mentioned in the post.

For OP, out of interest how were you going to achieve the "I had planned to make a large transfer in on the Monday to cover it." so it cleared on that day?

NightStar

AnonymousForObviousReason wrote: »

For OP, out of interest how were you going to achieve the "I had planned to make a large transfer in on the Monday to cover it." so it cleared on that day?

Via a transfer from another (high interest) account with the same bank. This is instant. My god - and even faster than faster payments and 24x7x365. Read on.


In Barclays' reply they also said, 'It is important to note that the items are not actually debited or credited to the account prior to the due date, merely that they are taken into account in the available balance.'

Hmmm so let me get this straight - it is not actually carried out but it is reflected in my current cleared balance? And how did that help exactly with the funds not being there?

I think the truth is that the electronic systems behind standing orders, direct debits, cheques and automated salary credits are stuck in the dark ages doing batch runs at the end of working days while slowly other banking processes are dragged into the 21st century. I had no idea servers took weekends off. Still unclear why mondays transactions do not occur in monday evenings run. Ho hum