Direct debit help, What to do next?

johnboi81

Hi,
I made arrangements with a company to take payments via Direct Debit on a weekly basis on each Tuesday; I have conformation from the company stating so….


I have since found out that 90% of these payments were taken on a Monday and some on a Thursday and have in turn been overdrawn and the DD returned followed by bank charges.


I have 2 other weekly DD on a Tuesday that has all successfully been paid. I can prove through bank statements that the DD in question would have been paid without any missed payments if it had been taken on the correct date.


I have spoken to the bank on several occasions (branch/helpline) and asked under the DD guarantee that they refund these payments as they have been taken on an unauthorised day. And under The Payment Services Regulations 2009 section 61 that they return my account to the state it would have been if the unauthorised payments had not been taken (returning charges)


Payment service provider’s liability for unauthorised payment transactions
61.Subject to regulations 59 and 60, where an executed payment transaction was not authorised in accordance with regulation 55, the payment service provider must immediately—
(a) Refund the amount of the unauthorised payment transaction to the payer; and
(b) Where applicable, restore the debited payment account to the state it would have been in had the unauthorised payment transaction not taken place.


The bank has since refused and sent me a letter stating I should complain to the ombudsman as the dispute is with the company and through no fault of the bank.


The company has also sent me a mail saying
"Good Afternoon,

Thank you for your email.

We requested that the money is paid to us on a Tuesday and looking at your account some of the payments were deducted on a Tuesday. However we have no control over when the bank chooses to take the money from the account. This is something that you will have to take up with the bank.

Regards
C. xxxx"


I am now £620 out of pocket due to returned DD and relating bank charges.


I have briefly spoke to a member of BACS who say I should make an indemnity claim, but the thing is I have tried but the bank keep telling me to go to the company.
What is my next step?

Crystallady

Most direct debits are for unspecified amounts and dates.

Did your direct debit mandate specify the day the payment was to be taken, if it did not specifically state the day, the bank have done nothing wrong.

With direct debits the company has control of the payment - it calls for the payment from your bank when it becomes due - the bank will check that the first payment is in line with the mandate set up on your account. If it differs from the mandate held the bank will return the payment.
In your case however if the mandate does not specifically state Tuesday then the bank will allow payments to go out whenever the company calls for them.

johnboi81

the letter from the company states the start date then frequency of collection as weekly.

SnowTiger

johnboi81 wrote: »

The bank has since refused and sent me a letter stating I should complain to the ombudsman as the dispute is with the company and through no fault of the bank.

Remind your bank of the wording of the Direct Debit Guarantee.

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

If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society

You can invoke the Direct Debit Guarantee if an error is made by "the organisation or your bank".

Banks cannot reject a claim simply because the error wasn't theirs.

Customers are advised to have the cash in their account the day before the Direct Debit is due, however I think that is only advice.

Crystallady

johnboi81 wrote: »

the letter from the company states the start date then frequency of collection as weekly.

So the bank haven't done anything wrong - they paid the amounts the company called for each week - like the letter states. So the payments were not unauthorised. So I can see why the bank are saying that the DDr Guarantee does not apply.

I'm still reckon your argument is with the company - I've never heard of a bank delaying the debiting any direct debit to a customer's account by two days (Tues - Thurs) and they can't debit your account before it's called for (Mon), which is what you appear to be saying the company has said.

johnboi81

Crystallady wrote: »

Most direct debits are for unspecified amounts and dates.

Did your direct debit mandate specify the day the payment was to be taken, if it did not specifically state the day, the bank have done nothing wrong.

With direct debits the company has control of the payment - it calls for the payment from your bank when it becomes due - the bank will check that the first payment is in line with the mandate set up on your account. If it differs from the mandate held the bank will return the payment.
In your case however if the mandate does not specifically state Tuesday then the bank will allow payments to go out whenever the company calls for them.

Crystallady wrote: »

So the bank haven't done anything wrong - they paid the amounts the company called for each week - like the letter states. So the payments were not unauthorised. So I can see why the bank are saying that the DDr Guarantee does not apply.

I'm still reckon your argument is with the company - I've never heard of a bank delaying the debiting any direct debit to a customer's account by two days (Tues - Thurs) and they can't debit your account before it's called for (Mon), which is what you appear to be saying the company has said.

I dont care whos fault it is, all I know its not mine. Apparently I have some guarantee that the bank does not want to acknowledge.

Crystallady

Direct Debit Guarantee

Your rights
Organisations using the Direct Debit Scheme go through a careful vetting process before they're authorised, and are closely monitored by the banking industry. The efficiency and security of Direct Debit is monitored and protected by your own bank or building society.
The Direct Debit Guarantee applies to all Direct Debits. It protects you in the rare event that there is an error in the payment of your Direct Debit.



Direct Debit Guarantee

• The Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits
• If there are any changes to the amount, date or frequency of your Direct Debit the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request
• If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society
  • If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to
• You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.

As far as the bank is concerned, the direct debit says weekly payment (also according to your paperwork) and the payment was made weekly - so where's the error?
Bit of a worry that the company doesn't appear to know how the DDR works - they stated in their email to you "We requested that the money is paid to us on a Tuesday and looking at your account some of the payments were deducted on a Tuesday" The bank doesn't pay the money to the company - the company calls for it from your account.

Hazzanet

Crystallady wrote: »

Bit of a worry that the company doesn't appear to know how the DDR works - they stated in their email to you "We requested that the money is paid to us on a Tuesday and looking at your account some of the payments were deducted on a Tuesday" The bank doesn't pay the money to the company - the company calls for it from your account.

Perhaps a matter of semantics.

The company does request it via BACS and the bank (or rather their computer) makes a decision whether to pay or not. The main difference here is that the transaction is a 'pull' one rather than a 'push'; i.e. the company (Service User) makes the automated electronic request to pull the money out of the payer's account account.

SnowTiger

Hazzanet wrote: »

Perhaps a matter of semantics.

As you say, it doesn't make much difference.

The company has said "We requested that the money is paid to us on a Tuesday..." If money is leaving the OP's account on the previous day that is a clear breach of the Direct Debit Guarantee.

If doesn't matter (to the OP) who's error it is. They are entitled have it, plus charges, refunded.

Note to OP: make a formal complain to your bank. If, having gone through their complaints procedure, you're still not happy take the matter to the FOS.

Goldiegirl

I think any complaint to the bank would not be upheld.

The company originates the direct debit, so they are in control of what day of the week the funds are debited to the bank account.

I think the ombudsman would take the same stance.

I think the party in the wrong here is the originating company.

SnowTiger

Goldiegirl wrote: »

I think any complaint to the bank would not be upheld.

The company originates the direct debit, so they are in control of what day of the week the funds are debited to the bank account.

I think the ombudsman would take the same stance.

I think the party in the wrong here is the originating company.

What you think doesn't matter.

The Direct Debit Guarantee clearly states:

If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society

It doesn't matter whether the error is made by the company or the bank. The bank should provide a full and immediate refund.

It's very, very, very clear.