Failed direct debit - who is responsible

michaels

I opened a cc, did a balance transfer and set up direct debit to take the minimum payments - the cc company assured me this would all be fine. When the CC company tried to collect the first DD the bank returned it as no mandate and the first I heard was when the next statement showed a £12 charge. Since then the DD has been set up exactly as before with no dificulty Of course the CC company blame the bank for failing to set up the DD properly and the bank calim the CC company must have submitted the request incorrectly. Who should I persue for a refund of the £12?

Thanks

tom188

Did it say on your first statement that the payment would be taken by direct debit?

Technically it is your responsibility and nobody elses to ensure that payments reach your account on time. However if it said on your statement that your payment would be taken by direct debit I would suggest that the credit card company would be easiest to persue.

Dylanwing

I would pursue the credit card company as they have taken the charge. If you call and explain the circumstances you may get lucky, but if not, write suggesting that the fee be refunded, and if they are not prepared to do that, could they provide a full explanation, and confirm who is responsible for the failure. (That way they might decide it's cheaper & easier to pay up!)
If they blame the Bank, send a copy to your Bank demanding an explanation and a refund. And then if they blame the credit card company, write to them

I get so fed up with call centre staff just sticking to a script (Not their fault, I know) that I always put complaints in writing.

benf90

Just came across this thread... a couple of days late but maybe this may be of some help...

Did the credit card company try to call for the DD soon after setting it up?

When a DD is set up it can't be used at all for 10 working days, if a company does try to use it then the bank will just automatically return it as unpaid with the reason 'No instruction'. When a DD is returned in this way its unlikely to show on your bank statement.

The '10 working days rule' is part of the terms of banks/companies taking part in the DD scheme. It will form part of the DD guarantee (which the company should have read / confirmed in writing to you - check that they did - if it was set up over the phone then it only has to be confirmed verbally). Specifically, it'll be the "we will always give you 10 working days notice in advance of any change to the date, amount of frequency of your account being debited".

Now, the CC company should have informed you that it takes 10 working days to set up the DD. If they didn't, I'd say you could argue it was indeed their fault and they shouldnt charge the fee.

I'd say its plain wrong of them to charge the fee anyway. In the situation outlined above (which may be whats happened to you) I know one CC company that will simply wait until enough time has passed then recall for the DD again, won't charge a fee, and won't record it as a late payment.

If the CC company did try to call for the DD within 10 working days then it won't be your banks fault - in fact, your bank have followed the correct procedures/terms etc.

Stephen_Leak

A cautionary tale for anyone setting up a Direct Debit. Leave as much time as possible for it to be set up and any problems dealt with. Don't assume it will be in place for the next bill until it shows on your bank records (you can usually see your DD's on your online banking) and you have written confirmation from the CCC. In fact, don't even assume that it will be in place even then. And, if you are paying off the full amount, check that the CCC have done as they were told and not set it up for the more lucrative minimum payment.