Natwest allowing debit transactions when there is 0 balance

loztiggy

Hi all I wonder if anyone can offer any advice?

A friend of mine has a basic account with Natwest, they type you can use as a debit card but withdrawals are only available through Natwest machines, and has no overdraft facility. They loaned a small amount of money from a payday lender, which did not get repaid as they could not afford it, and had spoken to the payday lender in advance of it defaulting to explain this, the payday lender did say they wouldnt take any payments and would sort an arrangement, but it would appear they have been taking several small transactions, Which has now amounted to over £100, which although the account was empty, have made it go into an overdraft (even though there is no overdraft facility on the account).

My friend had called Natwest who initially told her they would reverse these transactions, but the relevant department was closed, and when she called back she was told that they wouldnt reverse them, and that she now owes Natwest the money.

Is there anything that can be done in this situation? Surely the issue should be between my friend and the payday lender, and not involving natwest to further escalate her debt? I am trying to help her but I have no knowledge of Payday lenders (other than to avoid them) and I dont bank with Natwest either.

If anyone can offer any advice (and she doesnt need a lecture on payday loans, I have already given her that!) please let me know.

Thanks

pmduk

As I understand it, the repayment on these card transactions is guaranteed. Natwest is obliged to meet the transaction when it is presented.

loztiggy

I understand what you are saying, but surely if that was the case the first payment they tried to make (the full initial repayment which didnt go through as she had no balance) should have gone out, and not the subsequent smaller ones (with all the then added interest etc?)

premierfella

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I'm just making a guess here, based on the given details (that the larger, presumably full, repayment was refused but all smaller repayments were made) that the amount of the smaller payments might be relevant.

IIUC (I could be mistaken), Natwest's Basic Account (even though it has no overdraft facility) charges £6 for each payment refused, but does not charge a fee if the payment is made and then leaves you overdrawn. So if the smaller amounts claimed were somewhere close to the £6 returned item fee, Natwest might have made an active decision to approve the payments rather than charge the £6 each time for bouncing them (which would leave your friend still with the original Payday loan amount PLUS the bank charges PLUS the Payday lenders default fees for the bounced payments).

On the point about the Payday lender apparently saying that they would not take any payments from the card, unless the bank were informed at the same time by your friend that no further payments to the Payday lender were to be made, they had no way of knowing (I realise that your friend would have been relying on the fact that the Basic account had no overdraft, but when presented with transactions the bank still, I believe, have the choice whether to bounce the payment or pay it and chase the account holder for the amount).
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loztiggy

The thing is, this wasn't a direct debit, they were presented as debit card transactions (POS). All were presented on the same day and amounts range between £25 and £32 each. As I understand it, a bank cant charge for "bounced card payments"? Is there anything she can do?

YorkshireBoy

loztiggy wrote: »

Is there anything she can do?

Probably not for the payments already taken, but this should stop any future payments being made...

http://www.fsa.gov.uk/consumerinformation/product_news/banking/know_your_rights/payments (scroll down to 'cancelling a regular card payment')

dalesrider

loztiggy wrote: »

The thing is, this wasn't a direct debit, they were presented as debit card transactions (POS). All were presented on the same day and amounts range between £25 and £32 each. As I understand it, a bank cant charge for "bounced card payments"? Is there anything she can do?

Best thing would be to pay the loan off....

Could be they forced the transcations through as CPA. Which is something many have in their T/C as the payment method.

Whileyou can ask the bank to stop further payments. It will not stop the co from taking them. Only allow the money to be claimed back after debiting.
This will also leave them wide open to being taken to court for failure to pay.

This is one area where I think its worng that these payments can be returned. As they are in repayment of a loan.

stclair

How to cancel a Recurring Transaction

It is advantageous to inform the merchant you are cancelling the recurring transaction but not necessary. Please call the Retailer Disputes/Chargebacks team who will process the cancellation.

The Retailer Disputes/Chargebacks team are available from 08.00 - 18.00 Monday – Friday and are contactable on the number below.

Debit Cards 0845 366 0391

Please have details about the recurring transaction available - for example the merchant name, amount, date due and any policy/reference number.

http://www.natwest.com/personal/credit-cards/g4/recurring-transactions.ashx

YorkshireBoy

dalesrider wrote: »

Whileyou can ask the bank to stop further payments. It will not stop the co from taking them. Only allow the money to be claimed back after debiting.

That's incorrect, and hasn't been the case for nearly 3 years now.

You work for a bank I believe? I can understand your lack of knowledge/training, because Halifax are only just starting to tell customers about these 3 year old changes now...for T&C changes at the end of this year.

loztiggy

Thanks for all the replies. StClair, can you verify that these charges can be returned back to her account so the matter can be once again between her and the payday lender? She hasnt been able to pay the payday lender back because she is now in hardship, and the account is dormant, but she doesnt want to be owing Natwest the money, especially when the payday lender was informed of the circumstances and had agreed not to take the money, and then took it in several smaller payments on one day, as their attempts to get it in one lump sum failed. At no point had she any balance on the account.

stclair

loztiggy wrote: »

Thanks for all the replies. StClair, can you verify that these charges can be returned back to her account so the matter can be once again between her and the payday lender? She hasnt been able to pay the payday lender back because she is now in hardship, and the account is dormant, but she doesnt want to be owing Natwest the money, especially when the payday lender was informed of the circumstances and had agreed not to take the money, and then took it in several smaller payments on one day, as their attempts to get it in one lump sum failed. At no point had she any balance on the account.

I would ask your friend to dispute the transactions already debited and request a refund im sure the payday lender will contact them accordingly to recover the funds by another means.