Charged for early direct debit

Maddogjones

Hello all,

Background:

I don't have an over draft, I don't like them. I try to leave minimum of £500 in my account at all times to act as a an overdraft. Friday the 11th of this month I finished work stopped of at a guitar shop bought shiny things which left me with a balance of about £20. I intended to head home and transfer funds. But.. my inner child manifested while playing with my new kit and didn't get round to transferring funds until the Monday morning.

The problem:

When logging on to my online bank to transfer funds I noticed that a direct debit that is setup to be paid on or after the 25th of every month (like all my others as it's 5 days after payday) and been requested that day (Monday 14th). Obviously with not having sufficient funds the bank (HSBC) reversed the Direct Debit. I called the bank to discuss as I knew they would most likely charge for this. I explained that the direct debit was setup for 25th and pointed out that for the past 12 months this direct debit (which is with British telecom) had consistently been debited between the 25th and the 30th every month. Needless to say HSBC wasn't very helpful, I was told that I would be charged £25 for the declined DD and that it is up to me to make sure I had sufficient funds to cover.

I'm not sure what to do next. Yes, ok.. I didn't have enough funds but I'm hardly at fault that BT tried to claim a direct debit 12 days early. I've searched the web and have read bits about indemnity claims and DD guarantee but I'm not really familiar with such things. Or even if they cover situations like this. Also I'm not sure who to claim against would it be BT or HSBC..

If anyone has any suggestions or has had a similar issues I would welcome the help.


MDJ

dancingfairy

You should be able to claim on the direct debit guarantee. I think you do this through your bank (and then they argue it with whoever originated the DD).
Why on earth would they present the DD so early? this does not make any sense.
I think if I were you I'd double check the dates for the DD and then go the bank and try and sort it out. If no joy I'd then write a complaint to the bank and point out you were claiming under the DD guarantee scheme.
df

Buzby

A DD has NO set date, so a recall request that it was taken 'early' should be rejected. For the last 10 years, the date of the debit is controlled by the supplier - the consumer agreeing to an arrangement of deductions bring made on 'unspecified amounts on unspecified dates'.

If the supplier agreed with you to take funds on or after a certain date, and then take it early, it is them you complain to for breaking your agreement - the bank simply paid out when the firm asked for it.

The DD 'guarantee' is less than useless on occasions like this.

Atidi

Maddogjones wrote: »

Hello all,

Background:

I don't have an over draft, I don't like them. I try to leave minimum of £500 in my account at all times to act as a an overdraft. Friday the 11th of this month I finished work stopped of at a guitar shop bought shiny things which left me with a balance of about £20. I intended to head home and transfer funds. But.. my inner child manifested while playing with my new kit and didn't get round to transferring funds until the Monday morning.

The problem:

When logging on to my online bank to transfer funds I noticed that a direct debit that is setup to be paid on or after the 25th of every month (like all my others as it's 5 days after payday) and been requested that day (Monday 14th). Obviously with not having sufficient funds the bank (HSBC) reversed the Direct Debit. I called the bank to discuss as I knew they would most likely charge for this. I explained that the direct debit was setup for 25th and pointed out that for the past 12 months this direct debit (which is with British telecom) had consistently been debited between the 25th and the 30th every month. Needless to say HSBC wasn't very helpful, I was told that I would be charged £25 for the declined DD and that it is up to me to make sure I had sufficient funds to cover.

I'm not sure what to do next. Yes, ok.. I didn't have enough funds but I'm hardly at fault that BT tried to claim a direct debit 12 days early. I've searched the web and have read bits about indemnity claims and DD guarantee but I'm not really familiar with such things. Or even if they cover situations like this. Also I'm not sure who to claim against would it be BT or HSBC..

If anyone has any suggestions or has had a similar issues I would welcome the help.


MDJ

As a Direct Debit customer, you are fully protected by the terms of the Direct Debit Guarantee, as you have read.

Don't worry about the specifics. It's very simple. As far as your case is concerned, an Originator may not collect, or attempt to collect, a payment from you via DD where no advance notice has been given, or other than in accordance with the advance notice given.

You say your advance notice is that payment is to be collected on the 25th. The originator attempted to take a payment on 11th. So it was not in line with the advance notice you have been given.

So contact the bank and explain. Ask them to raise an indemnity claim on your behalf regarding the errant DD collection attempt. As the DD was refused by your bank, then obviously nothing was deducted so on this occassion nothing is due to be returned immediately.

However, the indemnity claim the bank raises can also claim for consequential losses (bank charges you have suffered as a direct result of the errant DD collection attempt)

Tell the bank this is what you want and expect them to do for you.
Unlike the DD amount collected which would need to be refunded immediately by the bank (if it was originally deducted), claims for consequential loss are not required to be refunded immediately by the bank, but rather once the bank receives the funds from the Originator which should take no longer than 14 days.

If, having asked the bank, they remain not very helpful, raise an official complaint with the bank in writing following their complaints procedure.

dunstonh

Do note that a reclaim under indemnity may see the money returned to your account but it will see it taken from BT. BT may in turn charge you late payment fees.

So, it may be better to raise a complaint with BT for taking it early rather than going through the direct debit scheme.

Atidi

dunstonh wrote: »

...So, it may be better to raise a complaint with BT for taking it early rather than going through the direct debit scheme.

Under the terms of the Direct Debit Scheme, any indemnity claim made by a payer regarding the incorrect actions of an Originator must be made by the payer via the paying bank.

Where an Originator receives such a claim directly from the payer, they should refer the payer to the paying bank.

Claims under the DD guarantee are collated by the paying banks and reported to Orginators sponsors.

Continual abuse of the Direct Debit Sceme by Originators may ultimately result in their Sponsor withdrawing their sponsorship of that Originator. (but that is the ultimate sanction. Normally the Originator will be coached by their Sponsor to ensure processes & procedures are improved to ensure their failings do not continually re-occur)

If, as you also suggest BT attempts to penalise the OP for paying late, when the fault lies entirely at the doors of BT, then that could indeed be the subject of a later separate complaint to BT.

bengal-stripe

British Telecom has stopped sending out statements, all the relevant information must be accessed on-line now.

Did you check your previous statement? What does it say about the date? Maybe the collection date has been altered and you failed to notice. Do not take previous dates as lasting forever.

dunstonh

The bill is owed. It was just collected early. Whilst that allows the guarantee scheme to be used, it does not actually achieve anything. It would leave the OP with the money back in their account and BT unpaid. So, the first thing the OP is going to have to do is return the money to BT. A pointless exercise.

Better to go to the bank with the evidence of the direct debit date from BT in order to get the £25 refunded. HSBC should refund it with the evidence showing it was incorrectly corrected. Then a complaint made to BT as they are the one that controls the date.

patanne

BT changed their t & cs recently & the bill stated a different DD date in small print. They moved mine from the 1st back to the 26th. I rang and complained about it. They manage to keep sending emails trying to sell me stuff, but couldn't send one to say they have changed the DD date! Luckily it didn't cause me a problem but it would have done if I had been paid on the 28th. There must be a lot of people effected by this - anyone who pays their line rental annually in advance for instance. It has changed from 14 days after the invoice to 8 days. I'm surprised this hasn't come up before & I haven't seen any warning in the MSE email although I may have missed that.

Maddogjones

Hello all and Thanks for all the replies.

I have Checked the dates on the direct debit mandate and it is setup to be taken on (or after) the 25th. I've not had any notice of any changes.

I telephoned BT on Monday to complain. I was offered a couple of excuses by the customer service rep but she was more interested in me making a payment as the DD was rejected. I declined to make payment until the 25th. I know, a bit childish but they've messed me about.

After further reading on the directdebit.co.uk web site, under the Incorrect payments section, It says:

If a Direct Debit payment has been taken which is not in accordance with the advance notice received i.e. too much has been taken or the payment has been taken on the wrong date you are entitled to an immediate refund of the amount debited from your bank under the Direct Debit Guarantee. If the payment due date falls at a weekend or on a bank holiday the organisation is obliged to debit your account just after the due date, not before, unless they notify you in advance of a change of date.

To request a refund under the Direct Debit Guarantee, contact your bank in person at the branch, by phone or write to them.

I will complain in writing to BT for not sticking to the DD guarantee and mention that I've not had any notice of any changes.

Will also write a letter to HSBC explaining my position and using points raised above requesting that the charges be reversed. Not sure how receptive they will be.

I'll post the outcome.

Thanks again for you suggestions folks

MDJ

StuC75

Forget the direct debit mandate in terms of checking what the payment date is..

Check what was advised upon your most recent monthly statement. since that would advise the most recent date and amount being taken (as per the Direct debit guarantee and how variations to date and amount are dealt with)...