Direct debit error led to overdraft charges

samanthani

Hi

My son has just informed me that he's got a massive overdraft, and is worried about his credit rating, all due to erroneous direct debits being taken from his Santander account.

About 3 months ago, he instructed his gym to change the bank account that his payments came from from his Santander account to a Halifax account. He did this verbally in the gym, and was assured it was all set up.

He's just received a letter from Santander/debt collection company (I'm not sure which) trying to retrieve the money - 3 payments of £25 a month for the gym, plus approx 3 month's overdraft at £5 a day :eek:.

He thinks the money is also being taken from his Halifax account.

How does he go about sorting this out ie clearing the debt and sorting out his credit rating.

I'm assuming that if the gym is taking 2 lots of monthly fees out of his accounts, it will be easier. Will the gym still be liable if it turns out they were only taking one lot of fees out, but didn't change the account details.

Hoping someone can advise me on this.

Sam

grumbler

It's very strange to hear that even now he still *thinks* and doesn't know for sure. What about statements - from both Santander and Halifax?

IMO, it's very unlikely that the gym was taking two lots of money. If it was, they are liable for everything.

Regardless, the best call is to contact the bank and to demand the full and immediate refund of all DDs and all charges under the DD guarantee:
http://www.bacs.co.uk/Bacs/Businesses/DirectDebit/Collecting/Pages/CustomersRights.aspx

Also, it's worth checking credit files and demanding all corresponding adverse records to be removed if there are any.

KeepFighting_2

Most importantly give your son a long lecture on
a) Reading letters from his bank
b) The importance of keeping track of his money using a bank statement
If he had done this the problem would have been sorted out with less problems.
c) Getting stuff in writing
Then

1) Ask Santander to recredit the funds taken in error. This will stop the problem getting worse.

2) Explain the situation to Santander see if they will refund the charges they may do as the funds were taken in error.

3) Depending on what is happening with the Halifax
a) If the money is being taken then write to Virign or go and see them and claim back any charges that you have not been refunded
b) If the money is not being taken then get this sorted out and set up the direct debit so you do not get in to trouble with Virgin. Then cover the overdraft and write to Virigin and complain and ask for the fees back that have been incurred, you will prboably have to prove who you spoke to at the gym and you may not get any money back.

agrinnall

samanthani wrote: »

Hi


I'm assuming that if the gym is taking 2 lots of monthly fees out of his accounts, it will be easier. Will the gym still be liable if it turns out they were only taking one lot of fees out, but didn't change the account details.

Sam

Yes, it will be easier if they have taken it from both accounts, although I can't understand why he doesn't know whether it's come out of the Halifax account too - he needs to learn to take responsibility for his money. But if that is the case then it's clearly an error by the gym and they should repay the extra that was taken and cover at least some of the overdraft costs - they may be able to argue that he should have noticed it earlier.

If it's only come out of the Santander account then it's more difficult if he has nothing in writing from the gym to say they had agreed to make the change. He might find it difficult to prove if it's his word against theirs. But first of all find out the facts, then take it up with the gym management.

grumbler

agrinnall wrote: »

If it's only come out of the Santander account then it's more difficult if he has nothing in writing from the gym to say they had agreed to make the change. He might find it difficult to prove if it's his word against theirs. But first of all find out the facts, then take it up with the gym management.

I think the gym will not dispute the revoked DDs and will be happy if he just pays them the disputed amount by other means.

samanthani

Well, I've just found out now that the gym only changed the bank in May. (So there weren't two payments being taken simultaneously.) I'm not sure when my son told the gym to change the bank, and I'm not even too sure if he knows.

Lecture to him (and his brother and sister) next time I see them. :mad:

Grumbler - I'm not sure what you meant by your last post. Can you clarify please.

I think he's just going to have to get in touch with Santander, explain the situation and hope they pay back the overdraft fees.

Sam

grumbler

When your son claims the money and the charges back under the DD guarantee, the gym can later dispute this with the bank and demand the money back. If, after claiming the money from the bank (and ultimately from the gym), your son pays to the gym by other means, they would have no reasons for disputing.

I think he's just going to have to get in touch with Santander, explain the situation and hope they pay back the overdraft fees.

I don't think they will unless he refers to the DD guarantee and demands this. And don't forget about the credit history that is likely to have been damaged (if he does care about his history).