Charged for cancelling my direct debit

SarahJayne

Last month I finally managed to pay off the last of the outstanding balance on my Virgin credit card, and as a result I cancelled the direct debit i had set up, using my online banking. However when i've gone to check my statement, Virgin have charged me £12, which is now the outstanding amount on the card, apparently because i didn't inform them that i was doing so. It seems wrong given that i had already made a payment that month and that no money was owed on the card. Does anyone have any experience of this...is there anything i can do or are they right?

balmk

If you have a direct debit set up with Virgin (MBNA) Credit Card, they will take the payment due regardless of any other payments that you may make against the account.

It sounds like you have been issued a statement, and cleared it manually, but have been charged a fee as they were unable to still collect the minimum due by DD as you had cancelled the instruction.

You could try ringing them to see if they would refund it as a good-will gesture, but this information is clearly displayed on the statement.

Fruit_and_Nut_Case

This crops up a lot. If you have not been paying off in full every month you are likely to have trailing interest to pay. Call them up, explain politely what happened, offer to pay right away by Debit Card and chances are they will cancel the penalty.

Good luck!

SarahJayne

Thanks for the info. I thought you could cancel a direct debit with your bank at any time without being penalised (direct debit guarantee) but didn't know that you were obliged to let the Credit card people know. Already called them and tried but rude employee didn't offer any goodwill. Never mind...i'll know next time. Will it affect my credit rating at all?

Paul_Herring

SarahJayne wrote: »

Thanks for the info. I thought you could cancel a direct debit with your bank at any time without being penalised (direct debit guarantee)

Well the bank with the DD won't penalise you, but the company claiming the DD can (within reason) make a charge for a failed DD as you've found out.

Whether they're morally able to is more debatable (as in your case)

but didn't know that you were obliged to let the Credit card people know.

It's always a good idea to let the claiming company know you'll be cancelling a DD. (Even if only for good manners.)

More realistically, you're probably better off leaving such DD's in place until after you're sure they won't be claiming on it again - in this case I would have waited until I'd had a letter confirming cancellation of the credit card an/or two payment dates (months) without a DD being called (you don't explicitly say you cancelled the card in your OP, but I'm assuming you did, since you felt you could cancel the DD.)

YorkshireBoy

The DD Guarantee states...

You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.

http://www.bacs.co.uk/Bacs/Consumers/DirectDebit/Pages/DirectDebit.aspx

When you started paying by DD, MBNA told you (in your DD confirmation letter)...

Important: Confirmation the set-up of your Direct Debit Instruction

Once your Direct Debit is in place, any extra payments you make will not affect the amount we collect unless you contact us at least five working days before the payment due date. Please note that working days do not include Saturdays, Sundays or Bank Holidays.

I believe they even put a message on your statements these days as well.

As Paul says above, never cancel a DD until you've had a zero balance statement and/or confirmation the account is closed.

redpete

SarahJayne wrote: »

I thought you could cancel a direct debit with your bank at any time without being penalised (direct debit guarantee) but didn't know that you were obliged to let the Credit card people know.

I think the charge is because their attempt to call on the direct debit failed, not strictly because you hadn't told them you were cancelling it.

chattychappy

Just don't lose sight of the fact that these things are meant to make your life easier...