£25 charge for a direct debit not going though This should be as massive scandal

LardyCake

innovate wrote: »

You'll have big difficulty finding a bank that doesn't charge similar amounts for transactions that failed because the account holder has mismanaged their account.

You are assuming "account mismanagement" is the only reason this could happen.

There is also the scenario where you have a DD setup to pay a company and that company makes a mistake and claims the wrong amount from your account.
This has happened to me: a payment of £120 was taken for a phone bill. The real bill was for less than £10, and I had been notified that the sub £10 amount would be taken.

I had sufficient funds to cover the real bill but not the incorrect amount (through good management ie: moving excess money to accounts that pay interest and leaving sufficient to pay that months bills plus a small buffer).

The bank paid but this sent me into an unauthorised overdraft with fees, interest charges and "paid item" fee. It could have equally been a "unpaid item" as with the OP.

On discovering this I claimed the £120 back under the DD guarantee, and informed the phone company. However that left the matter of the fees and interest charges. I discovered that these are not covered by the DD guarantee rules and that you have to rely on the goodwill of your bank or the company that made the mistake. Neither are actually obliged to pay. I double checked this with BACS

In my case having, at first, been told by the bank customer services that the fees could not be reversed, I raising a complaint and the fees and interest charges were eventually refunded as a goodwill gesture.

dalesrider

LardyCake wrote: »

On discovering this I claimed the £120 back under the DD guarantee, and informed the phone company. However that left the matter of the fees and interest charges. I discovered that these are not covered by the DD guarantee rules and that you have to rely on the goodwill of your bank or the company that made the mistake. Neither are actually obliged to pay. I double checked this with BACS

In my case having, at first, been told by the bank customer services that the fees could not be reversed, I raising a complaint and the fees and interest charges were eventually refunded as a goodwill gesture.

You are worng here. Under PSD (payment services directive) you cannot be charged for a error such as this. The bank has to put your account back in the same position it was before the amount was taken.
That would also include any offset interest as well as charges.

LardyCake

dalesrider wrote: »

You are worng here. Under PSD (payment services directive) you cannot be charged for a error such as this. The bank has to put your account back in the same position it was before the amount was taken.
That would also include any offset interest as well as charges.

You may well be right but that was not what I was told, remember I'm just a customer.

I've looked here: http://www.fsa.gov.uk/doing/regulated/banking/psd
to try to find where this is covered but could not find it. If you are able, please could you provide a link to the regulation that covers this situation or give a hint as to what or where I can search for it (eg: rule 5a, para 4 or whatever).

Then if this happens to anyone it might help them to get a speedier resolution with their bank because from my experience not all bank staff or BACS staff know about this.

BobQ

TowerBridgeFox wrote: »

£25 charge for a direct debit not going though
This should be as massive scandal

The bank helps its self to £25 of your money just because as direct debit could not be collected on a given day,. The direct debit could be for as little as £1 and the bank takes £25

For what administrative inconvenience exactly.

If this was a mistake by the bank you should complain.

If you are saying that this charge was due to you not having the money in the account then its perfectly reasonable for a bank to charge a fee for your failiure to fund the account. If you think that their fees are unreasonable why not take your business to a bank that appreciates your custom.

pinkdalek

TowerBridgeFox wrote: »

£25 charge for a direct debit not going though
This should be as massive scandal

The bank helps its self to £25 of your money just because as direct debit could not be collected on a given day,. The direct debit could be for as little as £1 and the bank takes £25

For what administrative inconvenience exactly.

You could always cancel your direct debits and pay your bills yourself, e.g. using your time, your phone bill, your petrol to the relevant post office/company. Just how much again does your bank charge you for paying your bills again, having a bank account, having the facility to pay for goods without carrying cash, being able to borrow money for short term fix before your payday.......If I was your bank I would charge you double for your arrogance.

YorkshireBoy

LardyCake wrote: »

please could you provide a link to the regulation that covers this situation

Here you go...

http://www.legislation.gov.uk/uksi/2009/209/pdfs/uksi_20090209_en.pdf (page 38)

61(a) covers the return of the incorrectly taken DD transaction value.

61(b) covers the return of any charges subsequently incurred.

LardyCake

Thanks Yorkshire Boy - unfortunately, not being a lawyer, I would not feel confident enough in my interpretation of a Statutory Instrument to argue my case with a bank on that basis.

Anyone know of consumer guidance from the likes of the FSA, UK Payments Council or BACS that covers "return of any charges subsequently incurred on incorrectly taken DD transaction value".

It does not seem to fall under the DD guarantee:
http://www.directdebit.co.uk/DirectDebitExplained/Pages/Incorrectpayments.aspx

The BACS Service Desk told me it was a "grey area" and relied on goodwill.

YorkshireBoy

LardyCake wrote: »

Thanks Yorkshire Boy - unfortunately, not being a lawyer, I would not feel confident enough in my interpretation of a Statutory Instrument to argue my case with a bank on that basis.

I'm not a lawyer and I understand it. It's only 2 paragraphs, referenced to 2 or 3 more.

But you don't need to be a lawyer. The DD originator will have access to a legal team (if necessary, and it won't be) who will say "the customer has us here, better pay up".

And if they don't, you refer the matter to the FOS. Originator gets a rebuke for wasting FOS time, and you still get your money.

The only 'grey area' I can see is what happens to any negative information placed on your credit file? Is that included in the 'putting you back in the position you would have been in' requirement?

Anyone know of consumer guidance from the likes of the FSA, UK Payments Council or BACS that covers "return of any charges subsequently incurred on incorrectly taken DD transaction value".

I nearly suggested earlier that it's better to read the actual SI, rather than someone's interpretation of it...even if that interpretation is provided by the FSA (or whoever has replaced them now?).

Because the wording is (surprisingly) quite simple and clear in section 61(b), you really ought to quote that in your dealings with an originator. In my opinion of course.

YorkshireBoy

LardyCake wrote: »

Anyone know of consumer guidance from the likes of the FSA, UK Payments Council or BACS that covers "return of any charges subsequently incurred on incorrectly taken DD transaction value".

Whilst it's not "consumer guidance", the FSA do go into a bit more detail about regulation 61 here...

http://www.fsa.gov.uk/pubs/other/psd_approach.pdf (page 72-73)

You'll note that they consider "immediate refund" to mean the same day, or the next day if the matter is reported at the very end of a working day.

I found the above by searching the FSA website for "payment services regulations restore". I didn't read all the results returned, so maybe if you search as I did you'll get your "consumer guidance"?

LardyCake

YorkshireBoy wrote: »

I'm not a lawyer and I understand it. It's only 2 paragraphs, referenced to 2 or 3 more. ....

It is in those referred to paragraphs that qualify the simple wording of 61(b) that cause me concern.

Anyway, I really don't want to get into an argument about it, especially after your help. You find it clear, I don't.