Nationwide illegal or legal practice?

7912kay

Just wondering if anyone can enlighten me on Nationwide interesting practice of 'stealing' my money for 7 days. I was due to pay some Direct Debits the other day, I had sufficient funds in the account to pay them all. Anyway on looking at my account I noticed two weren't paid and returned due to 'insufficient funds' but by paying the two my balance was still in credit so I couldn't understand as to why they weren't paid as on paying them wouldn't have made me overdrawn. So I contacted Nationwide to enquire as to why these two direct debits weren't paid and I was told as another VISA purchase transaction was pending. I informed them this was not the case I haven't bought anything for over 2 weeks so how could a VISA purchase be pending when I haven't bought anything. I also was told I would be charged £15 fee for the returned direct debit for insufficient funds. Anyway I got back to them asking why am I being charged £15 when there wasn't insufficient funds there was enough money to cover both direct debits and still my account would be in credit. They said they would investigate and yesterday they came back to me pleased to inform me that they would waiver the £15 fee??? I should think so I never had insufficient funds and informed me

"We are encountering an issue whereby funds continue to be reserved on an account after the transaction has been processed. This is the case on 23 August 2011. The problem is arising when a merchant reserves an amount initially on your account using an authorisation code, then debits using a different authorisation code or different date for the payment. Our systems are allowing the amount to leave as a transaction, but not automatically cancelling the reserve. This reserve is then on there for 7 days".

Sorry I am understanding this right, so I pay a direct debit with sufficient funds in my account so in my opinion the direct debit is paid for and the transaction is processed and that is the end of it. BUT no you the Nationwide continue to reserve the same amount for 7 days and if there is sufficient funds to cover the 'reserve amount' then the direct debit isn't paid even if the balance has a balance to cover the payments due. So technically I need to have not only the amount due in the account but the same amount for Nationwide to put a reserve on it for 7 days. Yes sort of she said, so if I went to a shop and bought some shoes for £50 and paid with my VISA card you think that would be the end of the transaction but if the shop assistant then asked for my card again for another £50 they would keep for 7 days I don't think I would be saying that is fine would I.

So my question is are Nationwide allowed to do this, not pay direct debits even though I have a balance to cover them all, instead bounce the payments claiming insufficient funds because the balance did not cover the same amounts to be put in reserve and then charge me £15. Also the Nationwide never contacted me to inform me of their practice I always check my account but I know 90% never look at their bank statements so how much money are Nationwide taking from peoples account and putting in their reserve for 7 days as their system is not automatically cancelling transactions after they are paid.

Also this reserve amounts never showed up on my Available balance this was exactly the same as my Account balance so if during this time if I had bought anything in a shop my card would have been refused as the bank were keeping the amount of money for transactions that had already been processed but their system had failed to cancel the transaction so reserved the money for 7 days after it had been processed and the merchant had been paid, in effect as though it hadn't been paid in the first place.

jalexa

7912kay wrote: »

long post snipped

Forgive me if I missed something (due to my eyes swimming), but this is nothing to do with Direct Debits and everything to do with the "reserved transaction". In terms of the "available balance" perfectly "legal", if you mean in accordance with the account Terms and Conditions. (I think)

Did you get to the bottom of that? Oversight? Error? Attempted fraud? If the Nationwide explanation doesn't satisfy escalate to a Complaint.

7912kay

jalexa wrote: »

Forgive me if I missed something (due to my eyes swimming), but this is nothing to do with Direct Debits and everything to do with the "reserved transaction". In terms of the "available balance" perfectly "legal", if you mean in accordance with the account Terms and Conditions. (I think)

Did you get to the bottom of that? Oversight? Error? Attempted fraud? If the Nationwide explanation doesn't satisfy escalate to a Complaint.

I am not saying it has anything to do with Direct Debits what I am asking is why wouldn't a bank pay Direct Debits and VISA purchases when I have a balance to cover them all??

I am told it is because I would not have sufficient funds AFTER the transaction was processed (that is the DD is paid to the merchant) for them to reserve the same amount for each DD for 7 days as there system fails to cancel the transaction AFTER it has been processed. Therefore if I had a balance of £50 and the DD was £40 the bank will not pay the £40 DD even though there are sufficient funds because their system fails to cancel the transaction after it is processed and wanted to 'reserve' another £40. Reason being is that a merchant who applies for money via DD or Visa purchase may use two different authentication codes and Nationwide system recognises two merchants so will pay and reserve for the same merchant for 7 days BUT if the balance hasn't got sufficient funds to cover the reserve as well then it will bounce and will not be paid. Furthermore this reserve that the bank are holding for 7 days does not show up on Account balance nor Available balance.

jonesMUFCforever

I think it will depend on how much the VISA transaction earmarked for the transaction.
This could be much higher than the actual transaction especially if you have stayed at a hotel or rented a car.

jalexa

7912kay wrote: »

I am not saying it has anything to do with Direct Debits

I thought you were...

"I am understanding this right, so I pay a direct debit with sufficient funds in my account so in my opinion the direct debit is paid for and the transaction is processed and that is the end of it. BUT no you the Nationwide continue to reserve the same amount for 7 days and if there is sufficient funds to cover the 'reserve amount' then the direct debit isn't paid even if the balance has a balance to cover the payments due"

what I am asking is why wouldn't a bank pay Direct Debits and VISA purchases when I have a balance to cover them all??

I stand to be corrected but I wasn't aware that as far as "Direct Debits" are concerned anything remained "reserved" after the payment has been made. So on that I can't help and am "out".

However Visa Debit transactions (as you have found out) can be "reserved". The effect of that is to reduce your "Available Balance". Are you saying that the online "Available Balance" is not the same "available balance" that Nationwide uses to process debits from your account? If so, and I think you are from the last sentence of your last post, that would be an issue to raise as a formal complaint. But Keep It Simple (S), focussed on that issue only.

And any response to my question whether the Visa Debit reserved funds were a result of oversight, error or attempted fraud?