Every payment is a liability - how to fix?

jago25_98

This is something I've been meaning to post for a while now.

It seems whenever a payment is made we trust the party taking the payment to take what they say they are taking. There is nothing to stop them emptying your account and, it seems even taking more and incurring charges.

For example, let's say you make a payment for £20 at an automated petrol station. Then days later when you can actually see the transaction on your online statement, they actually take out £21.50. Sure they're supposed to display that there's a £1.50 transaction charge, what if they take £100? There's nothing you can do to stop it proactively, only react on the back foot after it's happened.

Another example, my friend was (unfortunately) with AOL. AOL messed up so that instead of charging a flat fee they suddenly and without his knowledge charged him about £500 in one go, as pay per minute phone calls. At first his bank declined the request for the money as it was not authorised and there wasn't enough money in the account to pay for it. AOL requested the money again, and the bank declined. Then, on the third time AOL basically "forced" (or pressurised?) the bank (perhaps it was marked as a bill/debt), the account was emptied and sent into unauthorised overdraft incurring charges. The first thing my friend knew what had happened was when he went to a cashpoint and it said -£200!

My friends conclusion was that companies like AOL are in effect, given carte-blanche to your account. I think he usually paid AOL by direct debit but it could have been a Debit card, I will have to find out.

Sure you can move banks when this happens but that's not good enough. What is really needed is to see your money protected by agreement in your current account terms. There is no doubt a clause in there that says we may empty your account if we wish, especially for debt collection, to paraphrase.

How your money is being handled and banking in general is kept from public knowledge, not only for security ("security though obscurity is no security") but probably because the whole system is probably a shambles as well.

The only thing I know of that may help is the Cahoot Webcard, but I've seen it go wrong before including with EasyMobile. I've no idea why, but I'd love to know why!

Furthermore, take information on your statement. I've trialled many current accounts and they all give little information. It may say "*Paypal* joeBloggs", or it may say "Sainsburys London". That is rubbish information! What was the destination of the money? I have tried to get the information that the bank has to investigate before and the bank (well, a chicken over the phone), is a real pain to get the information from. I haven't have cause to take it far so far fortunately though. Has anyone had experiences of this?

Generally it seems if you want to know what the heck is going on with your money you're seen as a criminal investigating the system. I can only hope that people become more educated Open Information and transparency as something that can improve our lives on every level and that applies to everything we do.

Phoenix79_2

Keep your money under your bed.

p.s Why on earth would you pay £21.50 for £20 worth of petrol? I'd rather walk in and pay at the counter and save £1.50 per transaction.

jago25_98

Yeah, they'd like to phase out cash, and it depreciates.

The petrol was only an example

tom188

Ah another conspiracy theory...

if its fraud then youll get your money back
if its a mistake youlll get your money back, particularly under the debt guarantee
if your concerned about somebody emptying your current account with your debit card get a credit card
why should you need to know the destination of your money?

In your aol example if the mistake was made by aol they should have refunded any charges your friend had to pay. The bank is requested to pay the money, and if it will take it over the overdraft limit it will decide whether or not it should be paid. There is no "pressurising" done, it is electronic. They had a payment agreement with aol to allow aol to take this money from the bank account for the company and the bank must oblige if funds are available.

For example, let's say you make a payment for £20 at an automated petrol station. Then days later when you can actually see the transaction on your online statement, they actually take out £21.50.

get a receipt

My friends conclusion was that companies like AOL are in effect, given carte-blanche to your account

Well he has agreed to this in signing a continuous payment authority or direct debit form, but if they get it wrong he just needs to get it sorted out and monies due refunded.

What is really needed is to see your money protected by agreement in your current account terms.

Your money is protected, but if you have agreements to allow companies to debit money from your account, you have given them permission. Dont set any up if you dont want money taken away. If they get it wrong they will have to pay it back.

That is rubbish information! What was the destination of the money? I have tried to get the information that the bank has to investigate before and the bank (well, a chicken over the phone), is a real pain to get the information from. I haven't have cause to take it far so far fortunately though. Has anyone had experiences of this?

Its none of your business, the bank is dealing with it. What would happen if they provided this information and you "sent the boys round".

A_Nice_Englishman

I must admit I've never come across a petrol station that makes a transaction charge. If the charge wasn't made clear at the point of sale I expect Trading Standards would be interested. Did you report it to them?

In the AOL case, the Direct Debit Guarantee means that AOL should have told him 10 days before the direct debit was issued. If they didn't the bank would have had to make a full and immediate refund as soon as he told them.

All Web transactions I've made have given me the opportunity to print out the details of the goods ordered, name and address of the supplier, amount paid and sufficient account details to identify the card used without compromising security. Most have also sent me an email with this information in and allowed me to access them later by logging in to the webiste.

If I pay by card in a shop I get a recipt with the details on. If I order by phone I have to write them down myself but they are given on the delivery note / invoice with the goods.

I feel it is up to the individual to keep whatever records he feels are sufficient for his/her needs and to check no errors have been made. I do and on the one occasion my bank has made a payment in error they immediately refunded me and I never heard any more about it.

jago25_98

The petrol station is only a hypothetical example - it has likely never happened in this country.

The point trying to be made is that instead of you handing them the money like you would cash, you give them a number and they take what is agreed. This is generally safe but the design is inherently flawed. Payment like this is taking under the guise of giving.

Reciepts,
how can you keep records of money you haven't spent?

I've remembered another example from personal experience:

I once found £50 on my account for Sainsburys. Sure, I kept a wallet stuffed full of reciepts. After going through them there was no receipt. Perhaps I dropped the reciept or it went through the wash. However, in this case I knew it wasn't because, being a student at the time I never shop at Sainsburys and definately not spending 5 weeks of shopping allowance in one hit.

I took it to the bank anyway, expecting them to send me packing without a reciept but they refunded the money with no interestion from me. Can't help but just wonder at what happened behind the scenes, does that not interest anyone?
Lucky I noticed it, but the point is I shouldn't have to.

My critism remains:

1) Protection is reactive not proactive.
2) The process is about taking not giving.
; Every creditcard should be like the Cahoot Webcard, the existance of the product (generation of a new card with a limit on each) is an admission of the problem


Because the process is reactive, not proactive the time to correct the issue meant my friend lost interest on the money. However, the main thing is the principle; consumer comes last.

The situation as it is means the consumer has to be vigilent, the advice giving in this thread replies are useful. I just want everyone to know that you have to defend your money as well as save it.

tom188

OK whats the solution then? Do we want to take back 50 years of progress and start paying in cash again?

Payment like this is taking under the guise of giving.

Please explain. From your earlier examples, authorisation will already have been given.

Every creditcard should be like the Cahoot Webcard, the existance of the product (generation of a new card with a limit on each) is an admission of the problem

This would mean before every transaction we made we would have to request a new card number, regardless what the situation is - ie we would need our computer with us at all times, great.

n.b
The Cahoot Webcard is dying a death as we speak as Banco Santander loses interest in the idea, which has not caught on despite being in existance for over five years.

Direct debits /CPAs etc were designed mainly for convenience. I for one would not want to have to remember to renew my internet connection every month, or have to use a pay as you go mobile phone, or carry wads of cash around all the time, or end up being penalised for forgetting to pay utility bills.