Does a failed Direct Debit cost the bank anything?

JessiKatt

The story:

In July I opened an account with Nationwide. At the time I was receiving a higher wage and the plan was to have my wage go into my existing Barclays account, the direct debits for my bills to come out, as well as a standing order to my savings account and to my new nationwide account - this would be my spending money account.

The problem:

I lost that job, so never actually used my Nationwide account. I left it open thinking I would use it in the future and that as my OH banks with them, us both having accounts with them would look good when we start looking into mortgages.

On Thursday I came home to a letter saying that I am £120.15 overdrawn on this account. I rang Nationwide straight away and was told I had a Direct Debit (£2 to a charity) and a standing order for my rent both of which have bounced multiple times, costing £15 a pop. I argued that I had not set theses transactions up on this account, that they had been running long before I opened the account in question. I was put on hold then told I would be transferred to someone who could explain.

I was actually transferred to the collections department to make a payment. I explained as I have above and was told that it was impossible for the bank to set up these transactions and that I MUST have given my Nationwide details out. I denied this and we went round and round for about 20 minutes until she said she had no explanation and that I must pay the £120.15 or face a bad credit rating. I asked when the DDs were set up and was told April 2011, when I told her I didn't have the account in 2011 she said "sorry 2012" I thought something very odd was going on as the account was set up in July 2013 and I said as much, she didn't seem to care.


So I did some research myself and noticed that Nationwide offer an account switch scheme that closes your old account after transferring all direct debits, but that's not what I wanted and my DD kept running from Barclays. The Standing Order was to my mum and as I was short of cash my partner paid her from his account in August.

So I called back and was told that yes, I had switched accounts and that I must go in branch to discuss the problem, but after explaining that I work longer hours that the branch near my office was open and that I don't have a local branch, she gave the verbal equivalent of a shrug and was basically told to work it out for myself.

After ending that call, I realized that I had not cancelled the DDs so called back, explained the situation again and was this time offered a deal. The lady cancelled the DDs and reversed the in pending charges of £30 for the impending failed DDs. She could not help me with the amount already on the account which I would have to pay.

£120.15 may not sound like a lot, but I have just started a new job and won't be paid now until the end of November and in the mean time the cost of travelling to work is taking me to the end of my budget. I'm also trying to save for my wedding in May next year and really can't afford any additional expense.

In fairness I was using the internet on my mobile to set up the account and I was in a hurry, I'm starting to doubt if I did click set up new account as opposed to account transfer. I don't get bank statements and was not sent out any letters about the debt until the £120.15 hit my doormat.

So I'm wondering what charges the bank incurred for all this. What am I actually being charged for? No one at the bank can answer this and google hasn't been very useful.

If it's just a penalty for mismanaging money and the £15 is just a figure pulled out of the air, I think I might be able to get the money back, after all Nationwide's selling point is that they don't have share holders and so the customer is their number one priority.

Thanks for reading the rant, and any help you can give is greatly appreciated

X

dunstonh

Does a failed Direct Debit cost the bank anything?

The actual process of pressing a few buttons doesnt cost much. Probably no more than 20p. However, the cost of putting in place the systems that allow the transaction to be carried out as well as the staff member making the decision on whether to bounce the item or not would be a lot more.

If it's just a penalty for mismanaging money and the £15 is just a figure pulled out of the air, I think I might be able to get the money back, after all Nationwide's selling point is that they don't have share holders and so the customer is their number one priority.

Yet the banks won the court case. So, what do you have that you think will allow you to win?

Banks are generally forgiving on first time errors. They are less forgiving on people that dont contact them but continue to abuse their banking facilities.

Your best bet is to apologise for your poor money management and ask nicely if you can have a refund of the charges and you wont go it again. A bit of a grovel but you wont the person on your side. If you alienate the person you speak to then they will just say no.

JessiKatt

Not sure what court case you're referring to, or how I've abused my my banking facilities.

All I'm saying is that I had no idea that the charges were mounting up, if I had why would I allow a £2 direct debit to bounce at £15 a time?

I just think that the £120 is a big penalty for what was essentially a misclick and that if the bank hasn't incurred a charge for the failed transactions it would be more likely for them to waive the charge. After all, that amount is nothing to them but all that's keeping me going.

dunstonh

Not sure what court case you're referring to

The one on bank charges that effectively ended complaints about unfair bank charges.

or how I've abused my my banking facilities.

If you incur unauthorised borrowing charges then in effect you have borrowed money or attempted to borrow money without permission.

All I'm saying is that I had no idea that the charges were mounting up, if I had why would I allow a £2 direct debit to bounce at £15 a time?

I cant say. Some people dont check their statements. Some dont keep a reconciled balance going. Some people just bury their heads in the sand.

I just think that the £120 is a big penalty for what was essentially a misclick and that if the bank hasn't incurred a charge for the failed transactions it would be more likely for them to waive the charge.

If it was your first time offence then the banks do tend to refund some or all as a goodwill gesture. What have they said when you asked them?

BMN

JessiKatt wrote: »

I just think that the £120 is a big penalty for what was essentially a misclick

It's hardly a mis-click to switch your account/transfer direct debits from one bank to another.
You would have had to give details of your Barclays account.

JessiKatt

I haven't asked the bank yet, I wanted to know what the money they are taking is for. If I have have actually caused them to lose money on these transactions then fair enough but if they are simply taking money because they can, then it doesn't seem right.

I had no literature detailing the DDs on the account and as far as I was concerned the account had a few pound in to keep it open and nothing coming out, so why would I check my online banking.

I didn't ask to borrow money, and I wasn't asked. It just feels like the bank has done nothing for me and is asking for money for it. Nationwide didn't pay my bills, the DD came out of the barclays account. So what is it I'm being charged for?

Sorry if I sound silly but I've never been in this position before.

JessiKatt

BMN wrote: »

It's hardly a mis-click to switch your account/transfer direct debits from one bank to another.
You would have had to give details of your Barclays account.

I was told that I would have to give existing bank details as part of a credit check, I didn't give any details about the DDs already on that account.

JessiKatt

dunstonh wrote: »

If it was your first time offence then the banks do tend to refund some or all as a goodwill gesture. What have they said when you asked them?

The last person I spoke to did cancel the charges for October and that was without me asking, but seeing as all my DDs should have been dated dated for the end of the month, I'm not sure why they were being processed anyway

meer53

Just a thought...... How can you not be aware that your rent standing order has been returned unpaid ? Surely your landlord contacted you at the time ?

It doesn't really matter how much returning payments costs the bank, they state their charges, you accept them when you open an account.

JessiKatt

meer53 wrote: »

Just a thought...... How can you not be aware that your rent standing order has been returned unpaid ? Surely your landlord contacted you at the time ?

It doesn't really matter how much returning payments costs the bank, they state their charges, you accept them when you open an account.

The DDs continued to come out of my my barclays account so I didn't know there was an attempt being msde to take them from Nationwide too.

dunstonh

Are these direct debits or standing orders? A landlord would rarely use a direct debit as they would not be big enough. They would typically use standing order.