The AA took two payments in error - what are my rights?

nomorecreditcards

Hi there,

I recently phoned The AA when it was due for renewal and said I would be cancelling my policy as it was coming up at £52.50. They agreed that I could pay newcomers rate of £28.00. However when I checked my online balance yesterday it shows that both a payment of £52.50 and £28.00 have come out. This has taken me over my agreed overdraft limit and I have been advised by the bank that I will be charged at least £28.00 for this and that it will affect my credit rating. I asked the bank if they could stop the charge being applied as it wasn't my fault and I had notified them straight away but they said there was nothing they could do over the phone and that I would have to go into the branch. I work full time and the first time I can get into the bank is Friday. The man on the phone at the bank said I would be protected by the direct debit guarantee. Does anyone know if thats right?

I called the AA and the man I spoke to apologised profusely and said that a bank credit of £52.50 would be going into my account in the next 21 days.

What I am planning to do is write a covering letter to AA explaining what has happened, the name of the person that I spoke to, with his extension number, and explain that because of the possibility of going over my overdraft affecting my credit rating ask for some compensation for their error, along with the bank charge letter and hope that AA compensate me for this.

I would just like to ask for advice if anyone thinks that there is anything else I can do or if you think this sounds reasonable.

Thanks a lot.

dunstonh

The man on the phone at the bank said I would be protected by the direct debit guarantee. Does anyone know if thats right?

If they are direct debits then yes they will be. If they are debit card payments then no they wont. Also, if you use the direct debit guarantee scheme, the bank should refund the charges.

nomorecreditcards

Hi thanks for replying. Yeah they were direct debits. The bank were quite unhelpful really and said that they would only refund the charges if it was their error.

I'm a bit annoyed with myself that I didn't ask to speak to a manager at the AA and say that I needed the money back in my account immediately rather than in 21 days and for an agreement to pay my bank charges, but the man I spoke to was apologetic and helpful and I wouldn't be guaranteed to get anywhere anyway I guess.

dunstonh

The bank were quite unhelpful really and said that they would only refund the charges if it was their error.

Banks are suffering with low skilled staff nowadays and pressure on them (from above) to try and put you off using the guarantee scheme. What you have described is a classic example of when the guarantee scheme should have been used.

The AA have to wait until the money is confirmed cleared at their end before they return it. Otherwise you can end up with a double refund.

magpiecottage

From what you say, the AA is undoubtedly at fault.

However, so is the bank - FSA Rule BCOBS 5.1.11R says:

"(1) Where a banking customer denies having authorised a payment, it is for the firm to prove that the payment was authorised.
(2) Where a payment from a banking customer's account was not authorised by the banking customer, a firm must, within a reasonable period, refund the amount of the unauthorised payment to the banking customer and, where applicable, restore the banking customer's account to the state it would have been in had the unauthorised payment not taken place."
That means that even if the payment was using a debit card number, unless the bank can prove that you authorised it (which seems unlikely), they have to not only refund your money but also any charges.

So you can make a complaint to them that they are in breach of said rule. You can also take them to FOS. If you do that tomorrow, they will probably sort it by Thursday!

nomorecreditcards

Thanks for those replies guys. So would you write a letter/contact the AA or contact my bank and mention the FOS as you have just quoted? I'm considering going along to the citizens advice bureau for someone to help me regarding this too.

dunstonh

If you want the money back in your account tomorrow then go to the bank and get them to use the guarantee scheme and refund the charges. If they refuse then you complain to the bank that they have rejected a valid guarantee scheme claim (and mention you will take it to the FOS if they do not deal with it as you want).

http://www.thesmartwaytopay.co.uk/DirectDebitExplained/Pages/DirectDebitGuarantee.aspx

nomorecreditcards

Great thanks. Will try to sort that now.