Late Charge for SO payment

ybbon66

Hello,

I pay an MBNA card monthly, I did have it on DD with an additional SO to pay a bit extra. When I switched bank to Santander recently (Feb), I changed this to a SO only, paying back more than the minimum so there was no need for a DD at all.

The payment date has always been the 1st of every month. This month, the 1st was a Saturday so it didn't get paid on the SO until the 3rd. They (MBNA) then charged me a £12 late fee. I have had this refunded after complaining as I can get one late fee refunded in a calendar year, and I also changed the due date on the bill to the 6th which means it will always be paid on time now.

However, I wondered if anyone can explain this. Before calling MBNA I checked with Santander who told me there is absolutely no difference in paying a SO/DD - they are paid on the day requested or the next working bank and that has always been the case.

MBNA said that the funds are always taken on the 1st, and because they weren't I was charged. This is clearly nonsense, even by their logic as the payment in April was on the 2nd and March was on the 4th with no charge on either occasion.

The only reason I can see they did this is that I switched from DD under their control to a SO under my control and it's just another sneaky bank trick to get extra charges.

Eydon

SO and DD are different.

With a DD, MBNA would request the money on or before the payment due date ensuring that it reaches your account on time. If they fail to request it in time it's their fault and you won't be charged.

With a SO, you are responsible to ensure the payment reaches MBNA in time and the rule with a SO is that it will never leave your account before the date you set. As the date you had set in this instance was a Saturday, which is a non-banking day, it was correctly sent on the Monday (the next banking day).

Nothing sneaky about it. Just the rules that have been there since year dot.

bengalknights

Eydon has summed it up pretty but yes as its SO the responsibilty is with you to ensure it gets there prior to the working day of payment.

thenudeone

ybbon66 wrote: »

I switched from DD under their control to a SO under my control and it's just another sneaky bank trick to get extra charges.

You've already summed up the difference between a DD and a SO very nicely.

But - since a SO is under your control, it is ENTIRELY your responsibility to check the due dates each month (which could vary by a few days) and for any weekends or bank holidays which could delay the SO.

If you don't want to bother - use a DD.

Buzby

However it is within the bounds of reason simply to look at a calendar and factor in when the date falls and see any conflicts wit weekends and bak holidays. There is little point playing brinkmanship with an SO, find out the ideal date and then forget about it.

That way, you know what is coming out and when, with no hassle of asking for your own money back when an incorrect DD goes through.

Gizmo247

I believe most credit card providers have a 7 day cut-off which applies to the non-full balance Direct Debit payments (i.e. minimum payment)

Generally if you pay after the cut-off then the DD payment is made regardless of the manual payment value. If the manual payment is made before the cut-off then the DD payment could be recalculated to be anywhere between £0 and the expected amount on the statement.

You should check with your card provider how this is actually handled for your card.

If you want to make top-up payments then you should determine when the true monthly payment date of your bill is (i.e. the date when the DD payment naturally does not fall on a weekend) and set up a standing order for 4 days earlier (to be on the safe side and handle weekends well)

stclair

If a s/o is due on a Saturday it won't leave the account until the Monday.

ybbon66

Ok, duly reprimanded!

So the fact that with prior DD's for MBNA , the money left after the actual due date was irrelevant. The due date has now been changed to the 6th and payment of the SO on the 1st so it should never be a problem from now on.

I'm happier having the SO than a DD precisely because it is in my control but thanks for the answers so I know this for any future payments.